The state Early Childhood Education and Care Department wants to make it easier for new childcare facilities to get up and running to fulfill its promise to provide free childcare to all New Mexico families.
The department has rolled out two initiatives in recent weeks to streamline the licensing of new facilities, which are needed to fill a shortage of childcare spots.
The first is the Infant Toddler Contract Slots program, which has provided contracts with over a dozen providers to open hundreds of new slots for underserved children. The second is the implementation of Senate Bill 96, a new law allowing providers to operate home-based childcare facilities in residential areas without facing local zoning fees or other requirements.
“Those policy reforms and those strategic investments are working,” Early Childhood Cabinet Secretary Elizabeth Groginsky said in an interview. “More families are getting access to care; more providers are able to expand their programs.”
The state has “still a lot of building to do, but we’re heading in the right direction,” she said.
New Mexico has made strides in increasing the capacity of its childcare system since it expanded the subsidized program to families earning an annual income over 400% of the federal poverty level, the previous limit for no-cost care.
When Gov. Michelle Lujan Grisham announced the expansion in September 2025, her administration set goals: 1,000 more registered childcare homes, 120 more licensed homes and 55 new licensed centers.
So far, Groginsky said the state has added only 106 more registered homes, while it increased licensed homes by 48 and licensed centers by 17.
In May, the early childhood agency’s data showed the state was short by thousands of seats, and growth largely had been fueled by increasing the number of licensed facilities, The New Mexican reported.
The agency hopes to turn that around with its Infant Toddler Contract Slots program. The strategy, launched in June, so far has expanded the capacity of 13 providers by a total of 441 new slots. The program offers one-year contracts for providers to serve children who have developmental delays, live in rural or otherwise underserved areas, or who come from families earning 200% or less of the federal poverty level.
The state has awarded more than $1.1 million in contracts so far, spokesperson Julia Sclafani wrote in an email.
Groginsky said the program is considered a pilot and could be expanded next year.
One of the providers who received a contract is Kelli Sheldon, owner and director of Ms. Kelli’s House Inc. in northwestern Albuquerque, a facility that provides childcare and preschool services.
The facility has a long waitlist, which families sometimes stay on for years, Sheldon said. However, the new contract has allowed her to add up to 18 slots, expanding her continuous services from early childhood through preschool to more families.
“For me to be able to offer those programs and open that up was a big relief for them,” she said.
Expanding statewide childcare capacity will also depend on making it easier to open new facilities.
SB 96, which was signed into law by Lujan Grisham in March and went into effect July 1, reflects an effort to streamline the approval of home-based childcare facilities by placing the oversight of safety and other regulations solely with the state, Groginsky said.
Previously, cities and counties often required providers to go through zoning approval processes and meet other standards, such as for fire safety. That often led to duplicative requirements at the local and state levels, creating miles of red tape that slowed or discouraged some childcare providers from opening facilities, Groginsky said.
“We’re reducing some of the bureaucratic and the administrative burden,” she said. “This law is critical because home-based childcare is an essential part of our childcare sector.”
It remains to be seen how much SB 96 will increase the rate at which providers are approved for operation or shorten the application process – which can stretch for months. Groginsky said the early childhood department will track those changes in the coming months.
Lowering administrative barriers has encouraged providers to open more facilities in the city of Santa Fe, Assistant Land Use Director Maggie Moore said.
Before SB 96 before it went into effect, the city had addressed the issues as part of an effort to overcome a countywide shortage of roughly 2,000 childcare slots, Moore said.
Although the city does not track the number of applications to operate home-based childcare facilities, Moore said the change has made prospective providers feel more supported in opening facilities.
“We know housing is a huge cost for people in Santa Fe, and to be able to address some of that affordability with increasing access to quality home-based daycare – we know that that’s going to help the community and help our families stay in Santa Fe and thrive,” she said.
Some people have expressed concerns about making home-based daycares permissible “by right” in residential areas, as SB 96 states.
Santa Fe resident Jennifer Knight said she worries such policies would bypass safety and other regulations previously in place in residential areas, including those set by homeowners associations. She also argued the law does not consider residents’ concerns about neighborhood impacts from home-based childcare facilities.
“I love daycare,” Knight said. “I just want these kids to be safe and you to respect us. That’s all.”
Groginsky said the standards for childcare facilities have not changed – but they are now overseen only by the state. She noted the state still will conduct unannounced visits at childcare facilities at least twice a year and will address all concerns families raise about facilities enrolling their children.
“We would never have advocated for something we did not feel that we were covering,” Groginsky said. “Health and safety is our top priority.”