One Year In: Where the Montana Early Childhood Account Stands

One year after policymakers created the Montana Early Childhood Account, the state has established the board and approved its first investments, but grant dollars have yet to reach child care providers. The account provides an important new source of funding for Montana's early childhood and child care system, but the scale of the state's child care challenges extends beyond what this account alone can address. For this reason, the Montana Early Childhood Account should complement, rather than substitute for, direct state investment in child care if Montana wants to meaningfully address the child care crisis.

How the Montana Early Childhood Account Works

The Montana Early Childhood Account was created when the Legislature passed HB 924, which established the Growth and Opportunity (GO) Trust during the 2025 session. The Montana Early Childhood Account received an initial $10 million general fund investment in June 2025 and will receive 10 percent of the interest earned on the balance in the GO Trust account each year going forward.

HB 924 also established a 10-person account board, appointed by the governor and responsible for making funding decisions. Allowable uses of funds include recruitment and retention grants to support the child care workforce; quality improvement initiatives; supports for infants, toddlers, and children with special needs; and affordability initiatives, including expansion of the state child care subsidy program. The board was also directed to use the statewide strategic plan (Sustaining and Strengthening Montana’s Early Childhood System, Strategic Plan, September 2025 – September 2030) to prioritize funding.  

Beginning of Year One: Building the Structure

The first year of the Montana Early Childhood Account was state fiscal year (FY) 2026, or July 2025 through June 2026. The governor began appointing members to the 10-member board in November 2025, and the board held its first meeting in January 2026. The board approved a vision and bylaws in February and began identifying priorities for funding. The remainder of the first year was spent refining funding proposals.

In total, $97,920 was spent from the Montana Early Childhood Account in the first year, covering personnel costs for Department of Public Health and Human Services (DPHHS) staff, administrative costs such as travel and supplies, and indirect costs. No grant funding reached child care providers during the first year of the account.

End of Year One: Approving Initial Investments

Between April and June 2026, the board approved four initial proposals totaling $8.7 million over the next two years.

• Early Childhood Systems Research: In FY 2027, $200,000 is allocated to Child Trends, a national research organization, to conduct research on to the child care workforce.

• Early Learning Development Support and Training Grant: In FY 2027, $1.5 million in grants will be awarded, ranging from $1,500 to $3,000 per child care provider, based on the facility’s licensed enrollment capacity. A provider can use the grant to cover staff training costs on topics such as child development basics, working with children who have special needs, early literacy, and developmental screenings.

• Quality Incentive for Infant and Toddler Capacity Expansion Grant: In FY 2027, $1 million in grants are offered on a first-come, first-served basis, with awards up to $10,000. This grant can be used for costs related to starting or expanding infant and toddler capacity, such as purchasing cribs, changing tables, high chairs, play items, or safety supplies.

• Flexible Workforce Support Grant: In FY 2027 and FY 2028, $6 million in grants ranging from $2,445 to $3,835 will be awarded based on the type of program. Funds can be spent on child care for employees, employee benefits, compensation, or professional development.

Opportunities and Challenges Ahead

The Montana Early Childhood Account is projected to receive $2.9 million in interest from the GO Trust in FY 2027 and $3.25 million in FY 2028. Based on current revenue projections and planned spending on the four initial projects, the account is projected to have a remaining balance of $9,858,961 at the end of FY 2027 and $9,888,575 at the end of FY 2028. This leaves the board with an opportunity to think strategically about future investments.

At the same time, routing funding to child care providers has taken time. No grant funding reached providers during the account’s first year. The Montana Early Childhood Account grant application period runs from September 28 through October 26, 2026. Grants are administered on a reimbursement basis, requiring providers to cover costs upfront. Child care providers have expressed concern that they may not have sufficient funds on hand to cover these initial expenditures while awaiting reimbursement.

The size of the grants raises questions about the scale of their potential impact. A child care center can receive a maximum $3,835 Flexible Workforce Support Grant to use for employee child care, benefits, compensation, or professional development. The median child care center employs six teachers, meaning the maximum grant provides about $640 per teacher. If used to help cover the cost of employee child care, that amount would cover less than one month of the average cost of care for a preschooler. If instead the full grant were used to increase wages and divided among six teachers, it would amount to an hourly raise of roughly 30 cents per teacher for one year. While workforce support is an important investment, Montana’s child care workforce challenges are much larger than an individual grant can address.

As implementation moves further into year two, policymakers will have an opportunity to learn from these initial investments and consider how the Montana Early Childhood Account can best complement broader state support for child care. With close to $10 million projected to remain in the account over the next two years, future funding decisions should consider where limited dollars can have the greatest impact while recognizing that the account alone cannot address the scale of Montana's child care challenges.