Early Edge Updates
Despite Troubling Federal Budget Threats, Governor Newsom and Legislature Reach an Agreement That Includes Investments for Early Learning and Care
July 1, 2025 | For Immediate Release
July 1, 2025
For Immediate Release
SACRAMENTO, CA – Early Learning advocacy organization Early Edge California thanks Governor Gavin Newsom and the California Legislature for reaching an agreement that protects Early Learning and Care in the final 2025-2026 state budget as they made difficult decisions to close a $12 billion deficit and deliver a balanced budget.
We are grateful to see that the agreement preserves many investments that support families and expand access to high-quality care and education. The final budget investments, which include support for the expansion of Universal Transitional Kindergarten, will ensure California reaches the finish line to implement a universal preschool program that serves all 4-year-olds—a historic milestone for our state and nation.
Key TK investments in the 2025-26 budget include:
- Full Implementation of Universal Transitional Kindergarten (UTK): Provides $2.1 billion in funding for the final year of UTK implementation.
- 10:1 Ratios for Transitional Kindergarten (TK) Classrooms: Invests $1.2 billion ongoing for 10:1 child-to-staff ratios.
- English Language Proficiency Screening for TK Multilingual Learners: $10 million to support the use of English language proficiency screeners for multilingual learners in TK, and authorizes the State Superintendent to adopt a screener for 3- and 4-year-olds in TK classrooms.
- Local Control Funding Formula (LCFF) Backfill for TK English Learners: Backfills LCFF losses in 2025-26 and 2026-27 due to enactment of AB 2268 (Muratsuchi, 2024), which prohibits local educational agencies from administering the English Learner Proficiency Assessment of California to TK students, by using the kindergarten English learner count for purposes of generating LCFF supplemental and concentration grants.
We are pleased to see these other critical Early Learning and Care inclusions in this year’s budget:
- Enrollment-Based Reimbursement and Prospective Pay for Providers: Maintains that all state-funded child care providers are reimbursed based on the approved hours tied to families’ certified need, known as enrollment, rather than actual attendance. Beginning July 1, 2026, all providers will receive payments in advance based on enrollment.
- Preparation of an Alternative Methodology for the True Cost of Care: Reaffirms the state’s commitment to implementing an alternative methodology that reflects the true cost of providing child care to inform future rate-setting for reimbursement, and extends required quarterly progress updates through July 1, 2027.
- Provider Rate Increase in Lieu of Statutory Cost-of-Living Adjustment (COLA): Repurposes the statutory COLA to increase rates in a new COLA for providers, to be approved by the Legislature.
- Cost of Care Plus Payments: Extends monthly cost of care plus supplemental payments to providers through June 30, 2026.
Amidst uncertainty at the federal level, we are concerned about possible consequences of freezing Medi-Cal enrollment and adding new monthly premiums for undocumented Californians. We look forward to working with Governor Newsom, his Administration, and the Legislature to prioritize Early Learning investments, including ensuring that the 2026-27 budget includes funding for the additional child care slots and reaching Child Care Providers United’s goal of creating an alternative methodology that reflects the true cost of care. We’re committed to collaborating with leadership to serve more and younger children and support the comprehensive needs of children and families.
