Montana childcare providers are facing a financial squeeze as the state’s revamped subsidy payment system struggles to deliver reimbursements on time, threatening the viability of programs that serve some of the state’s most vulnerable families.
Lisa Mullen, owner of Kids Cave Childcare in Miles City, has watched payment delays mount since Montana’s Best Beginnings payment system launched in February. Nearly half of her nearly 100 enrolled children receive assistance through the Best Beginnings Child Care Scholarship Program, including foster children. Mullen has dipped into personal savings repeatedly to cover payroll and operating costs while waiting for the state to reimburse her.
“Last month I didn’t get my payment until the 20th, and recently I’d say it was rarely past the 12th,” Mullen said, describing a pattern of late arrivals that has left her cash flow severely constrained.
Systemic Strain Across Montana
The payment delays are hitting providers in regions already facing acute childcare shortages. Custer County, where Mullen operates, is among nearly 60 percent of Montana counties classified as childcare deserts—areas where licensed childcare capacity meets less than one-third of estimated local demand. The statewide shortage means that providers who exit the market or reduce enrollment can rarely be replaced.
Across Montana, some childcare operators have postponed payroll or explored high-interest loans to stay afloat while awaiting state payments. The Department of Public Health and Human Services, which oversees the program, declined to be interviewed about the scope and duration of payment delays and did not directly address provider complaints.
The department did report issuing more than $11 million in payments through the new system and noted it had sent providers more than 10 communications before the February launch. Federal requirements mandate payment processing within 21 days, a standard Montana has struggled to meet consistently.
New Rules Tighten Access
The payment system overhaul followed House Bill 648, passed by the Montana Legislature in 2023. The law shifted Best Beginnings reimbursements from a daily attendance model to fixed monthly payments, a change intended to stabilize provider income. However, the new structure limits families to one full-time childcare provider or two part-time providers each month—a restriction that has complicated care arrangements for working parents.
Chelsea Brent, a single mother of three, depends on the Best Beginnings scholarship to work. “If there’s no Best Beginnings, I can’t work. If I can’t work, I can’t live,” she said, underscoring how the program’s disruptions ripple through low-income households across the state.
Mullen said the combination of payment delays and the new system rules is testing her commitment to serving scholarship families. If the reimbursement problems persist over the coming months, she said she may reconsider accepting Best Beginnings enrollments—a move that would further shrink an already inadequate supply of childcare in rural and underserved Montana.
What Comes Next
The Legislature meets in regular session next in January 2027, giving lawmakers the opportunity to examine the Best Beginnings system’s performance and address provider concerns. In the interim, the pressure on childcare operators will likely intensify as the start of the school year approaches and demand for care peaks.
The situation underscores a familiar tension in Montana policy: legislative intent to improve a program—in this case, stabilizing provider reimbursement—can collide with implementation challenges that undermine the original goal and threaten the providers the law aimed to help.
