{"id":390048,"date":"2026-07-08T02:42:20","date_gmt":"2026-07-08T02:42:20","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/390048\/"},"modified":"2026-07-08T02:42:20","modified_gmt":"2026-07-08T02:42:20","slug":"california-makes-a-subtle-but-impactful-change-to-how-it-finances-preschools-2","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/390048\/","title":{"rendered":"California makes a subtle but impactful change to how it finances preschools"},"content":{"rendered":"

This story was originally published by EdSource<\/a>. Sign up for their daily newsletter<\/a>.<\/p>\n

Top Takeaways<\/p>\n

Preschool funding, once split between the general fund and Prop. 98, California\u2019s education funding formula, is now fully under the proposition.<\/p>\n

Supporters say the shift could help stabilize preschools not located in school districts.<\/p>\n

Opponents argue the change will stretch Prop. 98 funding too thin.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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\u2019s general fund. Privately operated nonprofit preschools, meanwhile, have been funded from the general fund, which fluctuates with the state\u2019s finances.<\/p>\n

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.<\/p>\n

\u201cIf community-based pre-Ks have a better option of getting Prop. 98 revenue in future years, it\u2019s going to backstop the vitality of the nonprofit sector,\u201d said Bruce Fuller, professor emeritus of education policy at UC Berkeley.<\/p>\n

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\u2019s constitutional education funding guarantee. The budget also expands eligibility, allowing the children of school district employees to automatically qualify for free preschool.<\/p>\n

Opposing perspectives on Prop. 98<\/p>\n

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.<\/p>\n

\u201cIncluding 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,\u201d Troy Flint, spokesperson for the California School Boards Association, or CSBA, said in a statement.<\/p>\n

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.<\/p>\n

\u201cAs 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,\u201d said Flint.<\/p>\n

History repeats itself<\/p>\n

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.<\/p>\n

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.<\/p>\n

The debate surrounding that decision echoes today\u2019s discussion.<\/p>\n

Because Prop. 98 funding is based in part on the previous year\u2019s spending level, removing preschool from the guarantee lowered the program\u2019s 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.<\/p>\n

In the current budget year, different interpretations of why voters opted into Prop. 98 \u2014 and whether preschool should be included or not \u2014 have continued.<\/p>\n

\u201cThis latest decision extends a concerning tendency to sidestep the rules of voter-approved Prop. 98,\u201d said Flint, of the school boards association.<\/p>\n

Supporters of this shift disagree. Fuller, of UC Berkeley, said returning all preschool funding to the state\u2019s education funding formula is \u201csound public policy because this is an education function and meets the intent of the voters and language of Prop. 98.\u201d<\/p>\n

Find an interactive graphic that breaks down early education funding sources at EdSource at the end of the original story HERE<\/a><\/p>\n

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