February 26, 2026

Prioritizing Increased Availability and Decreased Cost of Child Care in Colorado Through Regulatory and Rule Changes

Key Findings

Colorado’s Child Care Sector was Heavily Legislated between 2019 and 2025

• Between 2019 and 2025, Colorado was tied for second among all states in the number of early childhood related bills enacted, with 77 bills becoming law, only behind California.
  • Over-regulating child care providers, particularly small centers or home providers, can drive up child care costs and decrease availability, as it becomes more expensive and challenging to navigate Colorado’s regulatory framework.

Lower Child-to-Caregiver Ratios Don’t Necessarily Improve Safety

• Mississippi’s child care ratios are larger in every age group after infants compared to Colorado’s, yet in FY2024-25, Mississippi had a lower rate of injuries requiring medical attention or hospitalization in child care centers with an injury rate of 0.164% compared to Colorado’s 0.877%.
  • Both states recorded zero deaths in child care centers during this period.

Key Recommendations

Expand Home-Based and Small Center Care by Easing Local Ordinances

• Local zoning laws can inhibit opening new child care centers, particularly smaller, residential centers. Improving Colorado’s by-right siting to automatically treat child care facilities as a permitted use could expand supply and help bring down costs.
  • In 2024, the annual price of toddler care in Colorado was 22% cheaper in a home care setting than in a center-based setting. For infants, it was 35% cheaper.

Expanding the use of Shared Services Alliances (SSA) Could Benefit Small Centers and Home Child Care Providers

• SSAs can materially lower the overhead costs of operating a center by reducing administrative burden, lowering purchasing costs through negotiated discounts, and streamlining operations for small centers and home-based providers.
  • By making SSA participation an approved way to satisfy certain administrative or documentation requirements, the state could further encourage the expansion of SSA use among smaller child care providers.

Modestly Increasing Child-to-Teacher Ratios or Mixed Age Classroom Requirements Could Help Alleviate High Costs

• Data has shown that increasing the child-to-teacher ratio by one child across all age groups decreases child care center prices by 9-20%.
• It is important to note that increasing child-to-teacher ratios will require discussion around square feet per child requirements, impacts to workforce, and other secondary impacts.

Adopt a More Explicitly Risk-Based Licensing/Inspection Model

• Currently, Colorado’s 1-5 level Quality Rating and Improvement System (QRIS) captures more than 50 points of evaluation, creating a complex and likely ineffective system for determining true quality.
  • Smaller child care providers with few staff may not have the capacity to achieve a higher QRIS rating. Streamlining the system to capture fewer, more safety-focused points of evaluation indicative of true quality could help the system reflect quality in a more equitable fashion.

Introduction

The challenges Colorado faces with respect to the high expense and limited availability of child care are well established.[i] We can expect child care to be at least somewhat expensive because it requires labor-intensive services provided specifically for the age of the child. Additionally, the economics of operating child care centers are challenging.

This report looks at possible rules or regulatory changes that could be made in Colorado to improve availability and affordability without compromising safety. The recommendations covered in this report fall into three categories:

1.        Reducing child care operating costs by addressing labor expenses

2.        Increasing child care availability by making it easier to open and operate child care centers

3.        Expanding home-based and small center options by overcoming local hindrances

Most of the recommendations provided have precedents in other states. Those states’ child care costs are shared for comparison; however, it is important to note there are many factors driving cost and availability of child care and no single change will entirely solve the challenges we currently face.

The cost of real estate, facility investments to meet regulatory requirements, and staffing all contribute to high, unavoidable costs that must be shouldered by families for the much-needed centers to stay afloat. Between 2017 and 2024, the cost of center-based infant care increased 40 percent, a rate greater than the rate of inflation.