A State You'd Least Expect Now Offers Free Child Care For An Average $12,000 Savings

New Mexico has become the first state to offer free child care to all of its residents. Regardless of income level, all New Mexico residents can qualify for free universal child care as of November 1, 2025. New Mexico Governor Michelle Lujan Grisham told CBS News that the program would save families with children an annual average of $12,000.

New Mexico is one of the poorest states in the nation, despite some successful attempts by the state to bring more residents above the poverty line. So, while there is some critique along party lines about the program, many working parents dealing with the surprising cost of raising a child see free child care as a big help. While it might be considered "upper class" to pay for extra services like a full-time nanny, most working parents and guardians need some form of child care in order to work their own jobs. The moves being made in New Mexico may also prove attractive to other states in the nation, as Lujan Grisham also told CBS that child care is a larger household expense than a mortgage in the vast majority of states.

Lujan Grisham went on to say this decision could bode well for the entire country's financial future, noting, "All sectors of our economy are overperforming. You can't stay that course unless you have a robust early childhood and child care setting."

To pay for this initiative, funds will be drawn from New Mexico's Early Childhood Education and Care Fund, which is covered by the state's oil and gas tax revenues. Some free child care existed in New Mexico prior to November 2025, with an income cap set in 2022. Expanding the program past the income cap may prove more expensive for the state in terms of investment, but the returns in other areas may be significant.

"We're top of the bad list, whether it's crime or whether it's high school education outcomes, whether it's reading proficiency, whether it's college graduation," New Mexico House speaker Javier Martínez tells The Wall Street Journal. Alleviating families of $12,000 a year in desperately needed child care spending may be the key to turning around a variety of industries. "This is about investing in mothers and fathers being able to go back to the workforce," Lujan Grisham says to CBS.

The move is also about investing in child care facilities and workers. A 2025 state accountability report by the New Mexico Legislative Finance Committee says needs are strained: For every 100 children under two years old in the state, there are only 32 child care slots available. If New Mexico succeeds in this effort to meet child care needs, the rest of the U.S. may have a successful model to follow — and a reason to visit a cheap, great state for tourism.