Early Edge Resources
Fact Sheet
2026-27 California State Final Budget and Trailer Bill Summary: Early Learning and Care
July 21, 2026
On June 29, 2026 Governor Newsom signed the
final state budget, agreed upon with the California Legislature, as well as most of its associated trailer bills, including the TK-12 Education omnibus and education governance bills. Early Edge summarized the key takeaways from the final state budget and trailer bills.
For TK-12 Education (AB 126)
- Developmentally Appropriate Instruction in TK. Clarifies that Transitional Kindergarten instruction must be developmentally appropriate.
- Bilingual Teaching Pathways Program. Appropriates $10 million one-time Proposition 98 for the Bilingual Teaching Pathways Program (AB 2325 Early Edge sponsored bill)
- “Super” Cost-of-living adjustment. Adopts a 4.31 percent “super” cost-of-living adjustment (up from 2.87 percent).
- Universal PreKindergarten Planning and Universal Preschool Planning Grants. Appropriates $200 million one-time Proposition 98 for the Universal PreKindergarten Planning and Implementation Grants and $50 million one-time Proposition 98 for the Universal Preschool Planning Grant Program.
- Expanded Learning Opportunities Program. Provides at least $1,800 per unduplicated pupil rate for LEA’s with less than 55 percent of total unduplicated pupils for Rate 2 for ELOP.
- 14 Weeks of Paid Pregnancy Leave. Provides up to 14 weeks of paid pregnancy disability leave to all employees (paid for by the COLA).
- Wildfire Recovery Assistance. Appropriates $22.9 million one-time Proposition 98 General Fund to support local educational agencies that are continuing to recover from the January 2025 Los Angeles County Wildfires, including $4 million one-time for the Pasadena Unified School District.
For Child Care and State Preschool (AB 150)
- Additional child care slots. Funds a total of 22,700 additional child care slots, with a priority on serving children zero to three years of age.
- 20,700 Alternative Payment Program slots, effective October 1, 2026, and
- 2,070 General Child Care and Development slots, effective April 1, 2027.
- Cost-of-living adjustment for child care. Enacts a 2.01 percent cost-of-living adjustment to all subsidized child care providers in the form of a percentage increase to Cost of Care Plus rate supplements.
- Rate Reform and the Single Rate Structure. Requires the California Department of Social Services (CDSS) to conduct a survey to establish child care provider payment rates every three years instead of every two years to align with federal triennial Child Care State Plan requirements, and allows for the use of an alternative methodology instead of a market rate survey for purposes of fulfilling this requirement. Also prescribes how reimbursement rates are set under the single rate structure.
- Disaster Recovery Assistance. Appropriates $25.67 million from the Federal Trust Fund to CDSS to support disaster relief efforts related to disasters that occurred in 2023 and 2024.
- Non-LEA State Preschool funding shift. Shifts non-LEA state preschool programs under Proposition 98.
- Cost-of-living adjustment for State Preschool. Enacts a 2.01 percent cost-of-living adjustment to all state preschool programs.
- Community Eligibility Expansion for State Preschool. Significantly expands CSPP site eligibility to those operating within school site or school district boundaries with a student population that has at least 80 percent of students eligible for free or reduced-price meals, foster youth, or English language learners. In addition, expands family eligibility to those living or working within the school or school district boundaries, so they may enroll 3 or 4 year old children in a CSPP operating within those boundaries. The community eligibility provision was created by an Early Edge sponsored bill.
- State Preschool eligibility for LEA employees. Makes children of local educational agency employees eligible for State Preschool Programs.
- State Preschool eligibility for CalWORKs families. Extends eligibility for full-day preschool programs to children whose families need childcare services because they are participating in a CalWORKs program activity.
- Professional development for State Preschool. Increases the number of professional development days for State Preschool staff training from two days to five days.
For Education Governance (AB 181)
- Education Governance Restructuring. Transfers control of the California Department of Education (CDE) from the elected Superintendent of Public Instruction (SPI) to a Governor appointed Education Commissioner. The Commissioner will have executive and administrative authority over CDE.
- Office of the SPI. Establishes the Office of the State Superintendent which is staffed by deputies, associate superintendents, and other support staff. The bill does not give the office programmatic or administrative authority.
- Phase Two Governance Review. The Commissioner is required to develop recommendations for a second phase of governance consolidation by October 2027, including review of the future role of the Superintendent’s Office.
Other notable changes
- Program Alignment with federal requirements. Aligns state child care licensing requirements with federal requirements of the Child Care and Development Block Grant (First aid, reporting, emergency plans, etc.).
- Temporary absences (the “80/20” rule). Expands flexibility for family child care home licensees to be temporarily absent from the facility for no more than 20 percent operating hours in a calendar month, and makes clarifying changes for substitute providers.
- Child care infrastructure 15% set-aside. Allows CDSS to set aside up to 15 percent of funding associated with child care expansion awards for General Child Care and Development programs to fund minor repairs, infrastructure upgrades, and other readiness activities for subsidized child care programs.
- Transfer of funds between APP and CCTR programs. Authorizes CDSS to transfer funding across and within voucher-based child care programs, and separately, to transfer funding across and within direct contract-based child care programs.
- Other State Preschool Program changes. Clarifies 24-month eligibility protections for families transferring between State Preschool programs or voluntarily disenrolling, exempts families from fees for one certification period, streamlines enrollment priorities, and clarifies that ongoing income eligibility remains in effect regardless of increases in family income.