Here’s why SF’s subsidized child care program could have negative impact on some preschools

SAN FRANCISCO (KGO) — San Francisco is dramatically expanding who qualifies for subsidized child care, opening the door for who earn more money. Supporters say it’s a critical move to keep families from leaving the city altogether, but for some daycare providers, this shift could trigger serious, immediate challenges.

San Francisco has had a family retention problem. It knows it and it can’t seem to solve it.

“We have the lowest number of kids per capita in the United States and it’s not a recipe for a successful, thriving city,” reiterated San Francisco Supervisor, Stephne Sherrill.

Through the years, many city officials have fought hard to keep families from leaving.

When London Breed was mayor, her administration launched the first-ever subsidized childcare program with the purpose of helping families.

Except that it never really got the traction that the city wanted because a lot of people thought they didn’t qualify.

MORE: SF promising free or reduced cost child care for families; pathway for students to attend college

Now, Mayor Daniel Lurie has taken Breed’s creation and expanded it to included more middle and upper-middle class families.

“We are going to make sure that every family has the opportunity to access childcare in San Francisco,” announced Lurie.

Here are the numbers.

When the program was rolled out in 2023, a family of four had to make just over $158,000 to qualify for free child care. As of January 2026, that qualifying number has gone up to $230,000. A family of four making up to $310,000 per year would be given half of what the city has to offer.

This is all funded by voter approved Proposition C. It created an additional tax on individuals and businesses earning more that $50 million.

“It definitely makes sense for parents to be able to work and not have to spend everything on taking care of their kids,” said Matthew Charles, a San Francisco parent.

MORE: Mayor Lurie talks affordability, homelessness and bringing business back to the SF

While these subsidizes will provide needed relief for many San Francisco families, there is one thing that is not being reported, that is, the financial impact they could have on some childcare centers and preschools. These are the facts.

The Children’s Council of San Francisco estimates that the cost of taking care of one child at a center is between $22,500 and $29,500 a year.

Some are more expensive, like Phoebe Hearst Preschool which charges $35,000 for a full-day year-round program.

For director Irene Bryne. that represents a bit of a financial problem because the maximum amount the city will pay out for a preschooler is $25,380, leaving her to come up with the nearly $10,000 difference.

Parents cannot make up the difference.

“At this time no, they cannot, that is the fee that we get, there is nothing else that we can require from parents,” explained Bryne.

MORE: Does universal basic income work? Here’s how it changed this SF family’s life

That’s one reason Phoebe Hearst preschool has not joined the Early Learning for All program.

That is something that Supervisor Stephen Sherrill says needs to be reexamined.

“Again, these are the details we need to hammer through in this hearing. We need to see what is our flexibility under the law, where can we go beyond what ‘Baby’ Prop C said ahead, how many of those funds can we use for partial subsidy credit, how much can be used for full?” said Sherrill.

While Mayor Lurie has committed to expanding the subsidies, the Board of Supervisors could recommend changes to the way the Department of Early Childhood is running the program.

For example, any parent knows that if you’re applying for financial aid to any private school or college, you must provide extensive documentation on your earnings and assets through a third party.

Not so much through the city’s subsidized care program, only W-2 forms are required and tax returns are optional.

MORE: 5 states, including CA, sue Trump administration for withholding billions in social safety net funds

“We did have an experience with somebody applying to us for financial aid, they did not qualify but they later got a voucher from the city for their $25,000 to go to a different school,” revealed Bryne.

According to Bryne, the family had investment properties which were not reported. “So we want to make sure that going forward that the city sets this up that everything is equitable for everybody and that the families that need it, that they get it,” reaffirmed Bryne.

“We have to have that balance between strong accountability, making sure that people aren’t taking advantage of the public dollars but also at the same time giving access to those families who really need it,” promised Sherrill.

Also, any preschool that wants to subscribe to the Early Learning for All Program has to agree to abide by their curriculum. But Phoebe Hearst has its own curriculum which focuses on exploration through art and sensory experiences which studies have found increases personal growth and confidence.

Forcing a more academic curriculum may be one of many reasons why only half of the one-thousand child care centers in San Francisco have agreed to join the city’s subsidized program.