California Budget Expands Subsidized Childcare, Preschool for School Employees

“I can see a light in the tunnel,” said Carmen Perez, a Novato mom who has been waiting more than 18 months for an open slot for her toddler son. “I hope we can get off the waiting list. That would be awesome.”

The final budget marks a recent reversal for Newsom, who had vowed in 2021 to dramatically increase access to childcare and fund more than 200,000 slots. But after an early push of adding almost 130,000 placements, the state paused the expansion for three years.

The state was supposed to resume the rollout this fiscal year, but in May, Newsom instead proposed cutting 6,800 slots as part of his push to eliminate the state deficit. The Democratic-led legislature countered with a proposal to add 44,000 more before settling on the nearly 23,000 spaces.

Most of that funding will be allocated for vouchers, which families typically use to pay for home-based childcare, with a smaller portion for spaces at childcare centers for children under the age of 3.

“Democratic lawmakers reminded the governor of his commitment to young children and families, and the governor somewhat reluctantly did agree to continue his own momentum to lift young kids,” said Bruce Fuller, an education policy professor at UC Berkeley.

Fuller and his colleagues at the university’s Equity and Excellence in Early Childhood alliance found that during the period California expanded access to transitional kindergarten for all 4-year-old children, nearly 10% of community-based childcare programs and preschools shut their doors. These private nonprofits struggled to maintain enrollment as 4-year-olds left for TK at public and charter schools.

Some of the shuttered programs relied on state funding to provide the California State Preschool Program. Money for their programs came from the general fund, which can fluctuate depending on the state’s fiscal outlook.

To help stabilize these programs, this year’s budget shifts all funding for the state’s preschool program into Proposition 98, a 1988 ballot measure that guarantees minimum spending on education from the state’s general fund.

The California School Board Association and the California Teachers Association opposed the move, saying it would weaken funding for TK-12 graders. Requests for comment from both groups about the final budget have not been returned.

Fuller called the compromise to make all public school employees, including those who work for county offices of education and community colleges, eligible for the California State Preschool Program “a pretty good deal.”

A single parent earning $100,000 per year or a family of four earning $136,000 per year qualifies for the program. It prioritizes the lowest-income families, as well as children in child protective services or who have exceptional needs. The new rule means that school districts and community college employees could benefit from free early care and education. The budget also extends paid pregnancy leave for them.

“Democratic lawmakers were able to put in place a sound policy to protect Pre-K dollars from downstream economic troubles,” Fuller said, adding that the compromise with the teachers’ union benefited both their own children and children around the state.

Newsom and lawmakers also agreed to simplify a couple of eligibility rules: Families who live within a high-poverty school district are eligible for the state-funded programs and children can stay enrolled even if their parents earn more money after meeting income requirements.

Childcare providers applauded additional funding for the slots but were frustrated that Newsom and lawmakers only offered a 2% cost-of-living adjustment for state-subsidized childcare and preschool workers — less than half of what TK-12th grader teachers will get in the new budget.

“We are disappointed that the increase in rates doesn’t match the documented need for providers or the cost-of-living increase offered to our peer educators,” said Max Arias, chief negotiator for Child Care Providers United, a union representing home-based childcare providers.

He also criticized the state for imposing more mandates for his members — to undergo emergency and disaster preparedness and response training — without accounting for their cost.

“Adding slots alone doesn’t stabilize the childcare system,” said Heather Cleary, CEO of Peninsula Family Services, which runs subsidized childcare programs in San Mateo County. “The bigger challenge is that providers are being asked to do more with funding that doesn’t match the cost of operating high-quality programs, and the budget doesn’t necessarily address this.”