Report

Funding the Future: States' Approaches to Pre-K Finance (2008 Update)

With the benefits of pre-kindergarten acknowledged by policymakers, educators, and business and community leaders, the national momentum for state pre-k expansion has accelerated. To improve and sustain the quality of pre-k programs, states must make them a priority and ensure they receive sufficient funding. States have typically funded their pre-k programs with a combination of general state revenues and an assortment of federal funds.

High-quality public pre-k programs, however, cannot be created solely through better use and coordination of federal funds. As state-funded pre-k programs have grown, policymakers have come to understand the pressing need for more substantial and sustainable pre-k funding that can increase over time to keep pace with demand. To provide these funds, some states have turned to alternative sources such as lottery money, gaming revenues, and dedicated taxes to finance the educational needs of young children. In the two years since this report's original publication, state pre-k funding has increased by $1 billion. The increasing numbers of children attending pre-k, however, have meant that overall, average state per-child spending has decreased each year since 2002. Continued creative thinking about how to fund high-quality pre-k is clearly necessary. For example, one emerging trend is the use of state school funding formulas to distribute monies for pre-k, placing it within the confines of the politically stable K-12 budget and ensuring that funding grows with enrollment.

This report examines the range of different financial approaches states employ, how effective they have been in identifying funds, how sustainable those funding sources are, and how investments can be increased to improve pre-k quality and expand program access. The analysis encourages policymakers to think creatively about ways to supplement and sustain current funding streams for pre-k programs in their own states.