• Delaware is debating a $25.3 million investment into its state-subsidized child care program, known as Purchase of Care.
• A potential federal rule change could require the state to pay providers based on enrollment rather than attendance, costing an estimated $25 million.
• If the federal rule is dropped, officials propose using the funds to expand child care eligibility to more lower-income families.

Delaware child care has been a fixture of this budget season.

Gov. Matt Meyer pitched some $50 million toward early education in his proposed budget for next fiscal year. It included an $11.3 million federal grant to bolster systems, $8 million to pilot statewide hubs – and the largest piece in $25.3 million to boost Purchase of Care, or state-subsidized child care.

That line item proved a major talking point during a public health budget hearing in Legislative Hall on Monday, March 2, while connecting to broader visions for early childhood reform.

As it turns out, Delaware’s subsidized child care program in particular was already due to shoulder federal requirement changes dating back to the Biden administration. And those changes, effective April 1, could cost the state about $25 million to keep up.

That morning, lawmakers were briefed by the Delaware Department of Health and Social Services for more than three hours, before well over 50 public comments stretched late into the afternoon. Topics ranged from at-home care and centers supporting Delawareans with disabilities, to the ongoing strain of child care.

New Health Secretary Christen Linke Young said the Trump administration might drop these coming changes to pay providers based on child enrollment, before they’re effective.

And for Delaware, she would agree with that call.

Look back: Gov. Meyer pitches Delaware’s next budget. What’s in it for education?

Boosting Delaware child care, one way or the other

Purchase of Care is one program helping lower-income Delaware families – or those making below 200% of the federal poverty level, as of yet – afford care at various child care outfits across the state. Delaware pays those providers directly, around the end of the month, based on how many days these children attended.

Federal requirements could force states to change that.

Delaware would have to pay providers at the top of the month, based on their overall student enrollment, regardless of attendance. Young told lawmakers that would cost around $25 million each year, if requirements are not rescinded by the Trump administration.

It would mean more money for providers, she said, though also harsher policy needed around attendance expectations.

“If the federal government does change the rules, we need that full amount to shift to enrollment,” she said, addressing the Joint Finance Committee dais. “If not, our intention is to use it for increased eligibility.”

In other words, the administration hopes to invest about $25 million into this bucket either way. However, the health secretary said paying based on enrollment isn’t her recommendation.

Young told lawmakers the administration would rather see that amount infused into the program to expand eligibility to 250% of the federal poverty level. So, picture a family of three making roughly $80,000 would make the cut. No changes were proposed to co-payments or special education tiers.

This was met with mixed reviews.

“I’m sure some folks are going to have something to say about that,” cautioned Sen. Trey Paradee, committee chair.

For her part, Jamie Schneider was already editing her remarks in real time.

“Comments today suggested providers want to keep attendance-based payments instead of moving to enrollment-based payments,” said the interim executive director for Delaware Association for the Education of Young Children, representing some 900 early care providers. “That is inaccurate and I hope it’s a misunderstanding.”

Schneider welcomed the enrollment model, with “clear rules” to hold both providers and parents responsible. She and a handful of other speakers still also reinforced the necessity in bolstering the Purchase of Care program, from accessibility to reimbursement rates.

Some lawmakers hesitated on shifting away from enrollment boon for providers, while others pushed for attention on the benefits cliff. Meanwhile, child care became an economic discussion.

Is Delaware child care everyone’s business?

Some lawmakers did not care for this price tag, either way.

“So, there’s $25 million that will be saved because of this non-change, and you’re going to expand the program?” Sen. Dave Lawson posed to Young, while expressing concern for taxpayer dollars.

This story was produced by Spotlight Delaware as part of a partnership with Delaware Online/The News Journal. For more about Spotlight Delaware, visit www.spotlightdelaware.org.

A Delaware law passed last year in the wake of escalating assaults on the state’s corporate brand shielded powerful company leaders from facing certain lawsuits brought by smaller investors. 

What it didn’t do was violate the Delaware Constitution, the state Supreme Court ruled on Friday, Feb. 27. 

More than three months after hearing arguments, the justices ruled that the corporate law reform – known as Senate Bill 21 – did not strip Delaware’s prominent Court of Chancery of its constitutional authority to decide when a business deal is fair.

“The General Assembly’s enactment of SB 21 falls within the ‘broad and ample sweep’ of its legislative power,” the justices stated.

The ruling ends a bruising fight in Delaware over when the state’s business court should allow small-time investors to interrogate insider deals struck within companies by founders or other business leaders.

The ruling also averts what could have been an embarrassment for the state’s legal and political establishment had the high court overturned the law. 

More than a year ago, Tesla CEO Elon Musk — the world’s richest person — was calling on business leaders to move their companies’ legal homes out of Delaware. Musk had launched the campaign, which became known as “DExit,” after a Delaware Chancery Court judge ruled that he could not accept a multibillion-dollar pay package from Tesla.  

Just as the campaign appeared to be gaining a foothold, Gov. Matt Meyer, legislative leaders, and Delaware attorneys who represent corporations threw their collective heft behind SB 21.

They argued then that the legislation amounted to a “course correction” that would bring the state’s business courts back into alignment with rulings from a decade ago. Many also said the bill was needed to pacify executives who were considering following Musk’s calls to move their companies’ legal homes out of Delaware.

In response, a cadre of critics — which included national law professors, pension fund attorneys, and a handful of progressives within the Delaware legislature — derided SB 21 as a “billionaires bill.” 

Some also argued that the legislation was the latest in a string of recent changes to Delaware corporate law that have shifted the state away from protecting shareholder rights and toward giving greater deference to powerful executives.

Meyer and others SB 21 supporters rejected those characterizations last year. And on Friday, he celebrated the Supreme Court’s ruling.

In a statement, he said the decision affirms that “Delaware is the gold standard locale for global companies to do business.” He also stated that the number of companies that maintain their legal home in Delaware had increased throughout 2025 despite the DExit campaign.

“In short, SB 21 is working, and I’m glad it will continue to be the law,” Meyer said.  

The legal arguments for SB 21

When arguing against SB 21 in front of the Supreme Court last fall, one attorney asserted that the new law removed the Chancery Court’s time-honored and constitutional duty to say what is fair – or equitable – in a business dispute.