By Betty Márquez Rosales, EdSource
California is modifying how it pays for preschool by moving the entire California State Preschool Program under the same constitutional funding guarantee that supports students in transitional kindergarten through community college.
It might appear to be a simple shift from one funding bucket to another. But some education advocates say the decision to move all preschool funding under the same funding mechanism for TK-12 schools means financial stability for nonprofits and community colleges that also offer free preschool to eligible 3- and 4-year olds, while critics say the shift could reduce funding available for school districts.
The change gained traction this spring after preschool providers outside school districts raised concerns about enrollment and financial strain, with some pointing to the expansion of transitional kindergarten.
Though they share identical educational standards, California has funded preschool programs differently depending on their operator. School district preschool programs are funded under Prop. 98, which assures schools and community colleges a minimum funding level of roughly 40% of the state’s general fund. Privately operated nonprofit preschools, meanwhile, have been funded from the general fund, which fluctuates with the state’s finances.
Most recently, about $2 billion for preschool programs provided by school districts was covered by the Prop. 98 guarantee, while about $800 million for preschool provided by private nonprofits and community colleges came from the general fund.
“If community-based pre-Ks have a better option of getting Prop. 98 revenue in future years, it’s going to backstop the vitality of the nonprofit sector,” said Bruce Fuller, professor emeritus of education policy at UC Berkeley.
In his final state budget, Gov. Gavin Newsom agreed with that approach, moving the $800 million for nonprofit and community college preschool programs into Prop. 98. The change means the entire California State Preschool Program will now be funded under the state’s constitutional education funding guarantee. The budget also expands eligibility, allowing the children of school district employees to automatically qualify for free preschool.
Opposing perspectives on Prop. 98
While some legislators and preschool advocates argued the change will provide greater financial stability for preschools outside school districts, others warn it could ultimately reduce funding available for K-12 schools and community colleges.
“Including preschool within the existing Proposition 98 allocation would effectively add another grade level to the guarantee without providing the new and necessary resources to support it in an ongoing fashion,” Troy Flint, spokesperson for the California School Boards Association, or CSBA, said in a statement.
The state is transferring $800 million from the general fund to Prop. 98 to cover the current cost of nonschool district and community college preschool programs. But Flint said these costs are likely to grow as providers seek higher wages, higher annual cost-of-living adjustments and expanded services.
“As the program grows in the future, either due to expansions or annual (cost-of-living adjustments), we anticipate those costs will exceed the additional funding from the rebench, meaning nonschool-based preschool will eat into other Prop. 98 allocations and leave less money for TK-12 and community college students,” said Flint.
History repeats itself
California voters approved Prop. 98 in 1988, amending the state constitution to guarantee a minimum level of funding each year for K-12 schools and community colleges.
Soon afterward, lawmakers brought subsidized childcare and preschool programs under the Prop. 98 umbrella, where they remained until 2011. During the budget crisis following the financial fallout of the Great Recession, lawmakers removed nonschool district preschool providers from the Prop. 98 guarantee to ease pressure on education spending.
The debate surrounding that decision echoes today’s discussion.
Because Prop. 98 funding is based in part on the previous year’s spending level, removing preschool from the guarantee lowered the program’s funding base. Supporters of the move argued it was necessary during a fiscal crisis, while critics warned it could reduce education funding over the long term.
In the current budget year, different interpretations of why voters opted into Prop. 98 — and whether preschool should be included or not — have continued.
“This latest decision extends a concerning tendency to sidestep the rules of voter-approved Prop. 98,” said Flint, of the school boards association.
Supporters of this shift disagree. Fuller, of UC Berkeley, said returning all preschool funding to the state’s education funding formula is “sound public policy because this is an education function and meets the intent of the voters and language of Prop. 98.”
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