State Opportunities to Advance Early Childhood Education

The prospects for passage of meaningful federal legislation over the next two years aren’t exactly bright due to the new reality of divided government. While there’s always a chance of an unexpected bipartisan compromise becoming law, most experts expect the next two years to be marked more by oversight and lawsuits than legislative breakthroughs.

However, early childhood remains a hot topic in many states, with several of the governors’ annual State of the State addresses including proposals benefitting children and families. Below, we highlight four states that are particularly worth watching over the next two years.

California

Governor Gavin Newsom was re-elected for a second term after facing a special recall election in 2021. His budget proposal for the 2023-24 fiscal year builds on prior investments in early childhood, calling for a total of $855 million to be set aside for the second year of expanding transitional kindergarten (TK), the first of a two-year kindergarten experience for children born after the September 1 cut-off for kindergarten eligibility. Of the $855 million, $690 million is designated for rolling out TK to more four-year-olds (those born between September 2 and April 2) and $165 million is allocated for hiring an additional staff member for TK classrooms to maintain a low student-to-adult ratio.

A total of $116.3 million has been allocated for the increased payment rates to reflect additional costs associated with serving children with disabilities, dual language learners, and three-year-olds enrolled in the California State Preschool Program (CSPP). The 2023-24 fiscal year also marks the second year of a three-year process to increase CSPP enrollment of students with disabilities. This year, pre-K providers are required to have at least 7.5 percent of students with disabilities represented in their student population.

Newsom has delayed adding 20,000 child care spots until the 2024-25 budget cycle due to previous spots remaining unfilled. However, without system-wide improvements, such as higher wages and reimbursement rates, the early childhood system will continue to face staffing shortages, further impacting the supply of high-quality child care. Newsom has also committed to developing a single reimbursement rate structure and working with Child Care Providers United, the union that represents about 40,000 providers in the state, to negotiate a new agreement.

Michigan

Democrats now have full control of the state government for the first time since 1984 after the Michigan Senate and House of Representatives flipped and Governor Gretchen Whitmer was re-elected for a second term. In Whitmer’s State of the State address, she called for expanding the state-funded Great Start Readiness Program (GSRP) to all four-year-olds as part of a plan to lower costs for Michigan residents. GSRP currently serves 31 percent of the state’s four-year-olds, all of whom meet at least one of seven program eligibility factors. Whitmer’s proposal, which she plans to implement over the next four years, would eventually make all four-year-olds eligible.

Whitmer estimates that expanding GSRP to all 110,000 four-year-olds will save families around $10,000 a year. Whitmer has pushed free pre-K for all since she first ran for governor in 2018, and now with a Democratic trifecta, the proposal could finally become a reality. In the plan, it will be important to consider the impact of expanding public pre-K on the affordability and availability of the rest of the early care and education system, particularly infant and toddler care. Already, concerns have been raised by child care providers about the impact of losing revenue if four-year-olds enroll in the state-funded program.

Minnesota

After eight years of divided government, the midterm elections resulted in Democrats flipping the state Senate and Governor Tim Walz winning a second term. Democrats now hold a trifecta in Minnesota government for the first time since 2014. Walz, a former teacher, made education a dominant theme of his reelection campaign.

Walz’s proposed budget includes major funding increases for child care and per-child tax credits. Walz has stated that Minnesota’s projected record high budget surplus of $17.6 billion presents “golden opportunities” to address a wide range of issues. Specifically, his budget calls for creating a child tax credit of $1,000 per child with a maximum credit of $3,000 for families earning $50,000 or less. Walz has also advocated for expanding access to child care subsidies to reduce costs for families, as well as making full-day, public pre-K available to a greater number of families.

Minnesota currently has one of the lowest child care provider reimbursement rates in the country, setting a maximum rate at the 40th percentile of the market rate for infants and toddlers and the 30th percentile for slightly older children. These low rates mean that fewer providers enroll children who qualify for subsidized care and fail to receive the funds necessary to provide the highest quality of care.

To address this problem, Walz’s budget proposes increasing rates for providers in the state’s Child Care Assistance Program to the federal recommendation of the 75th percentile of the current market rate. Already, a bill has been making its way through committee that would do just that while mandating that the rate be automatically adjusted every three years.

Vermont

Vermont is once again a state with divided government after moderate Republican Governor Phil Scott easily won reelection and Democrats expanded their majorities in both chambers of the state legislature. In his recent budget address, Scott called for investing $12 million into the state’s Childcare Financial Assistance Program to expand access to affordable child care and reduce the cost of missed days on providers and parents. He has also called for increasing child care spending by $56 million annually in order to increase child care subsidies and expand eligibility to an additional 4,700 families. A much-awaited report recently set the price of expanding child care subsidies and improving the wages of child care workers at between $179 million and $279 million, revenue that could be raised by increasing payroll, sales, or service taxes. Scott has repeatedly said that he refuses to raise taxes to pay for child care, so any large-scale overhaul would require the two-thirds majority support necessary to override a veto.

Democratic lawmakers are wasting no time in attempting to expand access to child care and pre-K throughout the state. They have already introduced a bill that would expand child care subsidy eligibility to families making up to 450 percent of the federal poverty level and increase provider reimbursement rates to allow for higher wages for child care workers. The bill would also do away with the state’s current voucher system that pays for 10 hours a week of pre-K and would instead require every school district to offer free, full day pre-K to all of the state’s four-year-olds. Currently, about 57 percent of four-year-olds are enrolled in the state’s pre-K program.

Ultimately, quality early childhood education is something that benefits all states and families of all political persuasions. The infant-toddler child care crisis, for example, costs the country $122 billion in lost earnings, productivity, and revenue each year. 2023 could be the year when more states take positive steps to put early education within reach for all families.

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