The 2022-23 Budget: State Preschool

The 2022-23 Budget: State Preschool FEBRUARY 2022 Summary. The Governor’s budget includes Head Start. Many schools and several proposals related to State Preschool, with community-based organizations operate Head the primary goal of increasing the number of children Start—a school readiness program for children with disabilities enrolled in the programs. In this ages three to five. The program is targeted to post, we provide background on State Preschool, families living below the poverty line. Grantees describe the Governor’s proposals, and provide our contract directly with the federal government, comments associated with these proposals. with specific funding plans and services varying by grantee. The Head Start program requires that Background 10 percent of children enrolled be children with The state has several publicly subsidized disabilities. In 2019, about 80,000 three- and preschool programs for three- and four-year olds. four-year olds in California were enrolled in In this section, we describe these programs, as well Head Start. as the services provided to children with disabilities Other Subsidized Programs. Through the in these programs. state’s subsidized child care programs, children State Preschool. The state funds State can receive vouchers to attend private preschools. Preschool through two different funding sources The exact duration and program vary based on the depending on the provider. Local education provider and parent work schedules. Through the agencies (LEAs)—school districts and county offices General Child Care program, the state also directly of education (COEs)—are funded with Proposition 98 contracts with providers to serve children ages General Fund, while community-based organizations three and four, as well as other ages. We estimate (non-LEAs) are funded with non-Proposition 98 about 18,000 three- and four-year olds were served General Fund. Children are eligible for State in these programs in 2019-20. Preschool if their family earns less than 85 percent In 2021-22, State Enacted Plan to Expand TK of the state median income. Participating children to All Four-Year Olds. Budget trailer legislation either receive a part-day or full-day option. Providers enacted in 2021-22 gradually expands TK are funded based on a child’s attendance in the eligibility from 2022-23 through 2025-26. At full program, with higher levels of funding—known as implementation in 2025-26, a child who has their an “adjustment factor”—for certain children, such as fourth birthday by September 1 will be eligible for dual language learners and children with disabilities. TK, making the grade available to all four-year olds. In 2021-22, the state funded 110,000 part-day slots Schools Must Provide Services for and 50,000 full-day slots for State Preschool. Students With Disabilities Beginning at Age Transitional Kindergarten (TK). Under state Three. Federal law requires school districts law, TK is the first year of a two-year kindergarten to begin providing special education services program. School districts can enroll students in to all children with disabilities upon their third TK if the student has their fifth birthday between birthday. The specific support provided to each September 2 and December 2 of that school year. student is detailed in his or her individualized Similar to all other K-12 students, TK students education program, a legal document developed generate attendance-based funding through the by the student’s teachers, parents, and Local Control Funding Formula. In 2019-20, the state school administrators. served 89,000 students through TK. 2022-23 Budget Series 1 State Funded Inclusive Early Education the two related adjustment factors under current Expansion Program (IEEEP) in 2018-19. law—an adjustment factor of 1.54 for most children The 2018-19 budget provided $167 million with disabilities and an adjustment factor of 1.93 for Proposition 98 General Fund for one-time competitive children with severe disabilities. grants to LEA providers for the purpose of increasing Provides $500 Million One Time for IEEEP. access to inclusive early education programs. Grants The Governor’s budget also includes $500 million could be used for a variety of one-time expenses, one-time Proposition 98 funding for IEEEP. As with including training, facility renovations, and equipment. the funding provided in 2018-19, funding would be Grant recipients were required to provide $1 in local available for LEA providers through a competitive grant funds for every $2 received through the grant. Grant and could be used for training, facility modifications, or recipients also must commit to provide program data equipment. The Superintendent of Public Instruction and participate in an evaluation. Funding is available can set aside up to $50 million of the proposed for expenditure though December 31, 2024. funding for state-level assistance and support. Specifically, funding could be used for coaching and Governor’s Proposals job-embedded training, developing culturally and Requires State Preschool Providers Serve linguistically responsive resources, regional support Students With Disabilities. The Governor’s budget for State Preschool providers, and facilitation of a work proposes to require that at least 10 percent of children group. The state-level assistance could be accessed enrolled in State Preschool programs be children with by both LEA and non-LEA providers. Funding would disabilities. Under the proposal, an amount equivalent be available through June 30, 2027. to 10 percent of the provider’s funded enrollment Provides $62 Million One Time for Early would be guaranteed (not based on attendance) and Identification and Training. The Governor’s budget set aside specifically for children with disabilities. provides $2 million non-Proposition 98 General The provider is, in turn, required to maintain slots Fund for CDE to develop a process and tools for available for children with disabilities to enroll identifying children at risk for developmental delays throughout the fiscal year. The California Department or learning disabilities. Funding would be available of Education (CDE) would monitor compliance of through June 30, 2024. The budget also includes the requirement and assist providers. Providers that $60 million Proposition 98 funding to provide training are unable to meet the requirement must conduct and coaching associated with the early identification community outreach to special education partners to process and tools. Funding could also be used more increase their enrollment of students with disabilities. broadly to provide for statewide training and support Beginning July 1, 2025, any providers not meeting that helps align local practices with research-based the requirement may be placed on conditional strategies that improve student outcomes. Funding contract status by CDE, with the potential to have would be available through Jun 30, 2026. their contract terminated. CDE is also required to Other Proposals. The proposed budget also create a waiver process for providers that cannot meet includes several other State Preschool proposals not the requirement. specifically related to serving children with disabilities: Increases Funding by $308 Million for Serving • Provides $40 million to increase the adjustment Students With Disabilities. The budget provides factor for dual language learners from 1.1 to 1.2. $308 million related to the new requirement to serve 10 percent children with disabilities—$198 million • Proposes that, once determined to be eligible (Proposition 98 General Fund) for LEAs and for State Preschool, children and families can $111 million (non-Proposition 98 General Fund) for remain eligible for 24 months, rather than non-LEAs. This funding accounts for the expected 12 months under current law, without having to increase in the number of children with disabilities reestablish eligibility. that will be served in State Preschool, as well as a • Allows providers to serve two-year olds in State proposed increase to adjustment factors. Specifically, Preschool programs. the Governor proposes an adjustment factor of 2.4 for children with disabilities This would replace 2022-23 Budget Series 2 LAO Comments a number of changes to how providers operate. They may change their processes for marketing Increasing Access to State Preschool Is and improving relationships with other agencies Laudable Goal. Providing access to inclusive that can refer students with disabilities. Once settings can help children with disabilities improve enrolled, providers may need to make modifications in their development and school readiness, as to their existing curriculum and activities to ensure well as provide opportunities for meaningful they are suitable for children with disabilities. social interaction with their peers. The state Making these changes could require hiring has historically lagged compared with the rest additional staff, increasing training, or contracting of the nation in increasing access to inclusive with special education experts. Providers may also programs. In 2019-20 (the most recent year data need to make modifications to their classrooms is available), 27 percent of three- to five-year olds and playground to accommodate children with disabilities in California attended a regular with disabilities, particularly those with more early childhood program at least ten hours a week, severe disabilities. compared with 56 percent of three- to five-year olds nationwide. The State Preschool program Requirement to Serve 10 Percent Students also has historically had relatively low shares of With Disabilities Similar to Head Start. students with disabilities. In fall 2019, children with According to the administration, its proposal is disabilities represented 4.1 percent of children intended to emulate that of Head Start, which enrolled in State Preschool. This share varies requires that 10 percent of slots be set aside for significantly based on the type of provider, with children with disabilities. Given Head Start already LEAs serving children with disabilities at a higher has a similar requirement, and given the lower rate (4.7 percent of enrollment) than non-LEAs rates in State Preschool, we think the 10 percent (2.9 percent of enrollment). requirement proposed by the Governor is a reasonable starting place for setting expectations TK Expansion Also Likely to Increase for providers. Many State Preschool providers also Access to Inclusive Settings for Four-Year operate Head Start programs, often blending the Olds. In our conversations with special education two into one unified program. For these providers, administrators over the past several years, they the requirement proposed by the Governor will be often cited challenges in finding inclusive settings aligned with other programs they currently operate. for their preschool-aged children with disabilities. Some school districts, for example, do not LEA-Based Providers Better Positioned to operate State Preschool or Head Start programs, Serve Students With Disabilities. Meeting the which makes identifying appropriate programs requirements proposed by the Governor would be with available spaces challenging for districts relatively easier for LEA providers. Since school and families. Some districts also mentioned districts are directly responsible for providing challenges with serving students with disabilities special education services to their students, they in State Preschool given program regulations will find it easier to refer students to their State and requirements that can make it difficult to Preschool program and ensure that providers accommodate children with disabilities. As the state are coordinating with special education experts. expands TK to serve all four-year olds, all districts COEs also have special education experts that can will have greater ability to offer an inclusive program assist State Preschool in better serving students. on their elementary school campuses, likely Moreover, unlike non-LEA providers, LEAs would resulting in greater access to inclusive settings for have access to the IEEEP grant funding proposed four-year olds with disabilities. by the Governor, which would cover one-time costs for training, facility renovations, and equipment. Serving More Students With Disabilities Will Require Programmatic Changes. Implementing Recommend Redirecting Funding to Better the Governor’s proposal would require State Support Non-LEA Providers. Because non-LEA Preschool to effectively increase by 2.5 times the providers do not have these same advantages, we number of students with disabilities they serve in think it is likely that they will find serving a larger each classroom. In turn, this likely would require share of students with disabilities more challenging. 2022-23 Budget Series 3 This is particularly true of those that do not already Trade-Offs Associated With Allowing operate Head Start. We recommend the Legislature Two-Year Olds. Allowing State Preschool to serve set aside a larger portion of IEEEP funding for two-year olds would give providers more flexibility state-level assistance and support that can be to ensure that their programs are fully enrolled. accessed by non-LEA providers. The Legislature This flexibility could be particularly beneficial could also consider redirecting others sources for providers who also have General Child Care of funding for non-LEA training and support. contracts with the state and serve two-year olds For example, the Legislature could consider in those programs. Serving two-year olds in redirecting a portion of federal quality improvement State Preschool, however, would create some funding (currently totaling $120 million) for this administrative challenges. Providers would be purpose. These funds are currently administered required to increase staffing, as the child-to-staff by the Department of Social Services. Similarly, the ratios for two-year olds are half the ratio for Legislature may want to ensure a greater portion preschoolers (4-to-1 and 8-to-1, respectively). of the $60 million proposed by the Governor to be Providers may also need to modify their facilities set aside for training on early identification will be to address the unique needs of smaller children. available for non-LEAs. (For example, by installing diaper changing Consider Ways to Monitor Implementation stations.) Moreover, the Governor’s proposal is and Address Barriers to Access. While we think not clear on whether two-year olds enrolled in the 10 percent requirement is a reasonable starting State Preschool would be funded at the same rate point, the Legislature may want to reassess this as three- and four-year olds, or if they would be threshold in a few years, particularly in light of funded at the higher rate for toddlers that is used the major changes that will be occurring in early in General Child Care. Given the complexities of education with the expansion of TK. At that time, such a change, the Legislature may want to wait a the Legislature may want to increase or decrease few years and see how the expansion of TK affects the requirement. To the extent that providers have State Preschool enrollment before deciding to difficulty implementing the 10 percent requirement, adjust eligibility in this way. the Legislature will also want to consider ways to Recommend Adopting 24-Month Eligibility. change the existing program to help address the Providers in several counties that have been key barriers that providers face. The Legislature granted flexibility from certain state policies have could monitor these issues in a variety of ways, implemented 24-month eligibility for several years. such as by requiring CDE to report to the The policy allows three-year olds enrolled in State Legislature or contracting with an external agency Preschool to continue participating in the program to follow the implementation more closely. until they are eligible for kindergarten, helping to ensure the child is prepared for kindergarten. The change also reduces some administrative burden without adding cost pressure to the program. Applying this policy statewide also would create consistency for children and families. LAO PUBLICATIONS This post was prepared by Edgar Cabral and reviewed by Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. 2022-23 Budget Series 4