PASADENA, Texas – In the Houston area, a growing number of childcare centers are shutting their doors as funding losses ripple through the industry leaving working families scrambling and raising alarms among providers and advocates.
At Kids of Valor Academy in Pasadena, the impact is already visible.
“This is something like I’ve never seen before,” said founder Mona Jackson.
Since December, Jackson says her center has lost hundreds of thousands of dollars in state funding, forcing her to scale back from five locations down to just two.
“It’s just been a steady decline… we’re down about $160,000 per month in revenue,” Jackson said.
That financial hit, she says, has pushed her business to the brink.
“That loss looks like possibly having to file bankruptcy,” Jackson said. “That looks like having to lay off 20 to 25 teachers. That means I’ve really exhausted all of our options is to pay payroll.”
KPRC 2 News reached out to the Texas Workforce Commission for comment but hasn’t heard back as of publishing.
The impact is immediate with fewer available seats for children, especially in already underserved communities, and mounting pressure on parents who rely on consistent care to remain employed.
Jackson says she started noticing changes late last year into this year when Governor Greg Abbott announced an anti-fraud investigation into centers statewide and when the funding agency, Texas Workforce Commission, went to a new payment system.
“People really viewing what we do, that we are fraudsters, that were, you know, taking money from the government, we’re supporting people that don’t want to work or do things for themselves,” Jackson said. “That’s not the case."
In areas like Pasadena, the situation is even more critical. According to the advocacy group Children at Risk, parts of the city are considered “childcare deserts,” where the supply of licensed care falls short of demand.
Jackson says her center has felt that strain firsthand. Enrollment has dropped significantly as subsidy support declines, and remaining families face growing uncertainty.
“So even our parents that that do pay privately are struggling because it’s so expensive for childcare and inflation and everything,” she said.
Beyond funding cuts, Jackson describe a system marked by instability and a lack of transparency. She says they receive as little as two weeks’ notice before funding changes take effect.
Advocates at Children at Risk say these local closures reflect a broader statewide trend. In a recent analysis, the group found that 76% of low-income children under age six with working parents in Texas, about 441,000 children, live in areas where subsidized childcare is in critically short supply.
These “subsidy deserts” have grown significantly, even as demand continues to rise.
The data shows a widening gap: while more providers are meeting quality standards under the Texas Rising Star program, the overall number of subsidized seats has not kept pace with the needs of low-income families.
Providers say the crisis is not just about their businesses, it’s about the broader workforce.
Without reliable childcare, parents may be forced to cut hours or leave jobs entirely. At the same time, layoffs among early childhood educators are shrinking a workforce already under strain.
Despite repeated outreach, Jackson says she hasn’t received clear answers from the Texas Workforce Commission about whether subsidy programs are being reduced or phased out.
For now, many are bracing for continued uncertainty and urging families to prepare.
“I think that right now they need to have a backup plan. Let’s just be honest,” Jackson said.