The Texas Legislature approved an additional $100 million to support the Child Care Services program in the upcoming biennium, $50 million in BCY26 and $50 million in BCY27.
On July 8, 2025, the Commission approved Board Contract Year 2026 (BCY26) Child Care Services (CCS) Board allocations and targets. The allocation totals $1,436,029,277 (including the additional $50 million), an increase of over $116.9 million, or 8.9% over the BCY25 allocation of $1,319,162,553. We estimate this will support an average of about 148k children per day.
• FY 2026 Allocations
• BCY 2026 CCS Child Care Targets
During the legislative session, TWC estimated that an additional $100 million would serve approximately 10,000 children in the biennium (about 5,000 each year at $50 million/year).
While the $100 million state investment is significant, we are also faced with continuing increases in the cost of child care. Each year, to set the new FY targets, TWC uses updated data to forecast what the cost of care will be in the upcoming fiscal year. The updated data includes the most recent Market Rate Survey, which for BCY26 is the 2025 Market Rate Survey, as well as expected increases to the cost of care as more child care programs become Texas Rising Star certified.
TWC’s base payment rates are set at the 75th percentile of the most recent Market Rate Survey. There was an increase of 9% in the 75th percentile, statewide, based on the 2025 Market Rate Survey. In addition, TWC’s overall projected cost of care increased by 12.7% (based on a BCY26 estimated average cost of $790, an increase over the $701 estimated cost of care used to set BCY25 targets).
These additional state funds will allow TWC to help address these costs, and will allow us to serve more children than we would have been able to without this investment.