What happens when a state gives big cuts to child care?

What happened next was a big surprise.

“Within 48 hours I heard back and found out I was eligible,” Linch said. Instead of paying $3,068 each month for childcare for her twin girls, she would now be responsible for $1,000, with no additional changes or paperwork on her part. “I didn’t believe it,” Lunch said. “It just didn’t seem real to me.”

As the state breaks it down in this handy chart: If Linch’s family income is $10,000 per month for a family of four, their weekly family share of childcare is capped at $250. Previously, almost all of Linch’s salary went to childcare for her daughters. She was paid by the hour, so if she had to miss work because a girl was sick or Pine Forest was closed for the day, her income dropped.

But now she would have an extra $2,000 every month. What is she going to do with it? “We finally have the opportunity to save – period. We got to a point where we were watching our checking account get lower and lower every month,” Linch said. “It’s too early to know what impact this will have on us, but it will be much better.”

Vermont’s Act 76 reached the one-year implementation milestone this summer. The law, paid for with a new payroll tax, is designed so that families who have more than one child in care, like Linch with her twins, will save more. Importantly, the cost savings grow dramatically with two children; The high cost of caring for a second child is the tipping point for many families, where it may make more financial sense for one parent to leave the workforce, explains Erin Roche, executive director of First Children’s Finance in Vermont, a group helping implement Act 76.

Under the state’s old system, Vermont provided child care subsidies to families earning up to 350 percent of the federal poverty level, although many families receiving assistance had to pay higher copayments. Beginning October 7, Vermont child care subsidies will be available to families who meet 575 percent of the federal poverty level. For a family of four, this percentage is close to an adjusted gross household income of $180,000.

For people who study child care policy, such a generous leap is unheard of. Advocates and policy experts will be watching closely to see how this plays out. Roche estimates that the jump in eligibility will make subsidies available to 80 to 90 percent of all Vermont families with young children.

But it’s not just parents like Linch who are benefiting from the program. Under Act 76, Pine Forest, Linch’s child care center, will also see an increase in the amount it raises because it will be reimbursed for the actual cost of care, rather than just what families can afford. Instead of receiving $3,068 a month to care for Linch’s two toddlers, the center will now receive $3,768 — a jump of $700.

Vermont has also narrowed the gap in reimbursement levels for in-home child care and child care centers, as centers have traditionally been reimbursed for care at higher rates. This has made in-home child care more profitable and sustainable, and as a result, more than 1,000 new child care spaces have been created in Vermont in just one year.

Roche credits Vermont’s small size and the ability of state agencies to move quickly to get these systems up and running in support of Act 76. One obstacle, she notes, has been ensuring that the state’s IT system can keep it online could prepare the application system.

“Each of the changes in Act 76 required a government agency to create a system or change a system. They literally had less than two weeks to implement the first changes,” said Roche.

Not every family will see the immediate increase in benefits like Linch’s, but Roche estimates that many will, especially those with two parents who work full-time. Families with a parent or guardian at home and who are not working or attending school full-time are not eligible.

Having access to reliable childcare is one way to support parents’ participation in the labor market. And it could change people’s minds about the costs and burdens of having more children, with research showing that many families who choose not to have children cite cost as a major factor .

Linch said she and her partner initially wanted to have just one child, “but then we lucked out with twins,” she said with a smile.

Does the extra financial support for childcare change her view on having more children in the future?

“I don’t know how to answer,” she said. “But it would make it more feasible, that’s for sure.”