This is a message from the California Department of Education (CDE), Early Education Division (EED). **************************** Subject: Early Education Fiscal Year 2025–26 Budget Summary Attention:
Adam North
Adam North
adam@everychildca.org
****************************
Subject: Early Education Fiscal Year 2025–26 Budget Summary
Attention: Executive Directors and Program Directors of California State Preschool Programs
Fiscal Year 2025–26 Budget Summary
Governor Newsom signed the fiscal year (FY) 2025–26 California State Budget on Friday, June 27, 2025. The budget summary documents can be found on the Department of Finance website at: ebudget.ca.gov/budget/2025-26EN/#/BudgetSummary.
Despite a significant budget shortfall, the California Department of Education (CDE) is happy to share that funding for early education has increased in the FY 2025–26 budget compared to 2024–25. Specifically, the 2025–26 budget includes a total of $6.2 billion for early education, including a historic total investment of approximately $3.3 billion for fully implementing Universal Transitional Kindergarten (UTK) for all four-year-old children and $2.9 billion for the California State Preschool Program (CSPP). This represents an increase in total appropriation of about $2 billion compared to 2024–25.
You can find the links to the budget legislation at the bottom of this email. The CDE would like our local partners to be aware that collective bargaining is still ongoing between the state and the Child Care Providers United (CCPU) union. As a result, there may be additional changes that the CDE will follow up with once an agreement has been reached.
We look forward to working with each of you to realize the vision of this budget and support all of our local partners as we work to provide the highest quality educational opportunities through Universal PreKindergarten (UPK) and support equitable access for all across the state.
Described below are the early education investments and related investments in more detail.
Universal Transitional Kindergarten
The CDE is excited to announce that the 2025–26 budget includes funding to fully implement Transitional Kindergarten (TK) so that every child who turns four by September 1, 2025, can enroll in TK in the 2025–26 school year!
This expansion marks a significant milestone in our ongoing commitment to early education equity and access. All UTK classrooms must maintain, on average, a school site ratio of one adult for every ten students. Although the adult-to-student ratio is changing, the maximum class size average of 24 is not changing. The Early Enrollment designation will be discontinued on July 1, 2025, and all eligible children will be enrolled as UTK students. For more information on TK frequently asked questions, please visit the CDE TK Frequently Asked Questions (FAQs) web page at www.cde.ca.gov/fg/it/tkfiscalfaq.asp.
Specifically, the 2025–26 budget includes:
• $3.3 billion total ongoing Proposition 98 (P98) General Fund (GF) to support full implementation of TK expansion for all four-year-old children. This investment includes a total of:
• $2.1 billion ongoing P98 GF to support the full implementation of UTK, so that all children who turn four years old by September 1 of the school year can enroll in TK.
• $1.2 billion ongoing P98 GF to support further lowering the average student-to-adult ratio from 12:1 to 10:1 in TK classrooms.
• Modifications to the penalty for districts when a school site's average TK class size is more than 24 pupils such that penalties are calculated based on the TK average daily attendance (ADA) of the school site not meeting the requirement rather than the TK ADA of the entire district.
• A cost-of-living adjustment to the Local Control Funding Formula of 2.3 percent, which applies to TK through grade twelve (TK-12).
• $10 million one-time P98 GF for the CDE to select a list of developmentally appropriate screening instruments that will measure the extent to which TK multilingual learners will benefit from additional support in English by screening their English language listening and speaking skills.
• $7.5 million one-time P98 GF to mitigate reductions in Local Control Funding Formula apportionment funding to local educational agencies (LEAs) resulting from the recent exemption of TK students from the English language proficiency assessment.
Universal Prekindergarten Grant Extensions
In recognition of the ongoing need for support and flexibility in program implementation, the budget also included extensions for several key UPK grants:
• UPK Planning & Implementation (P&I) Grant Extension: The 2021–22 and 2022–23 UPK P&I Grant expenditure dates have been extended to June 30, 2028. Grantees may continue to leverage these resources to support ongoing implementation efforts to ensure the successful expansion of UTK across California. For questions, please contact UPKPlanningGrant@cde.ca.gov.
• The Early Education Teacher Development (EETD) Grant Extension: The EETD Grant expenditure date has been extended to June 30, 2028. Grantees may continue to leverage these resources to support teacher candidates in reaching their educational goals to teach in CSPP and TK classrooms, as well as support professional development for current CSPP, TK, and kindergarten classroom staff and administrators. For questions, please contact EarlyEducatorGrant@cde.ca.gov.
• UPK Mixed Delivery Grant Extension: The UPK Mixed Delivery Planning Grant expenditure date has been extended to June 30, 2028, for Round 1, 2 and 3. Grantees may continue to leverage these resources to support planning for the expansion of UPK through the mixed-delivery system, and to plan for increasing access to high-quality early learning opportunities. For questions, please contact UPKMixedDeliveryGrant@cde.ca.gov.
California State Preschool Program
The CDE is excited to see continued investments in the CSPP. As described above, there is currently no agreement between the state and the CCPU union. Once an agreement is reached, the CDE will follow up with any new information applicable to CSPP.
As of now, the 2025–26 budget for CSPP includes the policies and fiscal changes described below.
Shifting to Funding Based on Enrollment Beginning July 1, 2026
• For 2025–26, the budget continues the previous COVID-era policy of “hold harmless,” with a slight modification.
• Specifically, for 2025–26, if a program is open and operating in accordance with its approved program calendar, and remains open and providing services throughout the program year, contract reimbursement is based on the lesser of:
• The maximum reimbursable amount stated in the contract, or
• Net reimbursable program costs.
• In previous years, the “hold harmless” policy required contractors to be open and offering serves; for 2025–26, the contractor must be open and providing services.
• Beginning in 2026–27, the budget specifies that contractors will move to a model that funds based on enrollment. Specifically, contract reimbursement shall be based on the lesser of the following:
• The maximum reimbursable contract amount
• Net reimbursable program costs
• The product of the adjusted child days of enrollment for certified children times the contract rate.
• The CDE encourages contractors to use the final year of the “hold harmless” (2025–26) to increase enrollment to prepare for the shift to enrollment-based funding in 2026–27.
Augmentation to Support Enrollment of More Three-Year-Old Children
• The budget includes approximately $100 million for the CDE to allocate to CSPP contractors to offset any local reduction in slots due to increases in the number of three-year-old children served in their programs.
• Allocation of these funds will be included in future CSPP contract amendments, expected to be released in Fall 2025.
Cost of Care Plus Rate
• The Budget maintains funding to continue the Cost of Care Plus Rate monthly payments adopted for state-subsidized childcare and preschool providers, consistent with requirements related to the reimbursement floor established in the 2024 Budget Act.
• The 2025–26 Budget provides $19.3 million P98 GF and $10.2 million non-P98 GF for the CSPP to support increases to the monthly cost of care payments.
• At the time this email is being released, no agreement has been reached between the State and the CCPU, therefore the Cost of Care Plus rate increase will take effect immediately only for centers. Family Child Care Home Education Network (FCCHEN) providers will continue to receive the previous Cost of Care Plus rates as reflected in the chart below in the column entitled “Licensed Family Childcare Providers,” in keeping with the now expired memorandum of understanding and Welfare and Institutions Code Section 10427.
• CSPP contractors shall refer to the following per-child Cost of Care Plus rates for FY 2025–26, until further notice:
|
Region |
Licensed Family Childcare Providers |
Centers |
|
Central |
$140 |
$152 |
|
Northern |
$141 |
$154 |
|
Southern |
$160 |
$174 |
|
Los Angeles |
$171 |
$186 |
|
Bay Area |
$211 |
$230 |
• The CDE has issued guidance to FCCHEN contractors with more information for providing Cost of Care Plus payments to family childcare providers.
Prospective Pay
• The 2025–26 budget acknowledges a new federal requirement for payments to be made to childcare programs in advance of services.
• While CSPP is not subject to this federal requirement, to support alignment across the system, the 2025–26 budget includes $9.5 million to help CSPP contractors prepare for implementing prospective pay.
• This requirement will apply to CSPP contractors who subcontract and CSPP contractors who provide service through FCCHEN providers.
• The CDE will issue a management bulletin in the upcoming months explaining what this means for contractors and with more details on implementation.
• Contractors will not be expected to begin implementing prospective pay in the 2025–26 FY. These funds are intended to support contractors in preparing for prospective pay in future years.
Inclusive Early Education Expansion Program
• The 2025–26 budget reduces funds available for state-wide system building supports for inclusion, part of the Inclusive Early Education Expansion Program to $10 million from the originally planned $50 million.
• This funding was originally intended to address state-level systems building and alignment of local practice with the research and practice-based strategies that support inclusive fiscal and programmatic educational planning and best promote pupil outcomes and program quality. The decrease in available funds limits statewide support for coaching, professional development, and resource development.
Teacher Preparation and Professional Development
The 2025–26 budget provides the following for teacher preparation and professional development:
• $300 million one-time P98 GF to establish the Student Teacher Stipend Program, which will provide $10,000 grants to teacher candidates completing the required student teaching hours beginning in the 2026–27 school year, and available through the 2028–29 school year.
• Of this amount, $5 million is available to support a public outreach campaign and a grant management system to facilitate uptake and access to student teacher stipends, teacher residency funds, and national board certification dollars.
• Candidates would need to be pursuing preliminary multiple subject, single subject, education specialist, or PreKindergarten through third grade (PK-3) early childhood education specialist credentials.
• $70 million one-time P98 GF to increase funding for high-quality teacher residency programs.
• $30 million one-time P98 GF to extend the timeline of the existing National Board Certification Incentive Program to support National Board Certified teachers to teach and mentor other instructional staff in high poverty schools.
• The budget reflects a total of $68.2 million one-time GF to support the Golden State Teacher Grant Program. The new funds in the Budget will provide grants to applicants in the 2025–26 FY.
Key Links
For more details, please see the following budget bills:
Budget Bill Language:
• Assembly Bill (AB)102, Budget Act of 2025, leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260AB102
• Senate Bill (SB): SB 101, Budget Act of 2025: leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260SB101
Trailer Bill Language:
• AB: 121, Education Omnibus: leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB121
• SB: 120, Early Childhood Education and Childcare: leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260SB120
You have received this message because you are subscribed to an e-mail list from the California Early Education Division. To unsubscribe from this list, go to www.cde.ca.gov/sp/cd/ci/emailindex.asp.