As transitional kindergartens have increased, places for 3- and 4-year-olds in public and private preschools have decreased
Fuller’s team also found that families in the highest-income communities were the most likely to apply for the new public school preschool spots. In the wealthiest fifth of Los Angeles County zip codes, Brentwood, demand for public preschool skyrocketed 148 percent as families opted for a free program instead of paying up to $36,000 a year for private preschool.
Enrollment, meanwhile, has increased by only 50 percent in the poorest fifth of zip codes, where many families are left with subsidized childcare centers or relatives – especially since some public schools only offer a half-day option.
The full effect on the childcare sector is still uncertain. California allowed subsidized child care centers to keep their pre-pandemic budgets, even as they lost 4-year-olds. This “hold harmless” grant is scheduled to end in July 2026, and more closures are expected to follow.
Policymakers hoped the new public school seats would free up scarce childcare spots for younger children as 4-year-olds flocked to public schools. But there were many regulatory and financial hurdles that prevented targeting younger children.
“It’s not just flipping a switch to say this classroom is now going to serve 2-year-olds,” said Nina Butti, executive director of EveryChild California, which advocates for publicly funded child care and early education. Operators must reconfigure classrooms, install new sprinkler systems and hire many more teachers, Butty explained.
“It’s a nightmare,” she said. “You have to get the OK from the fire marshal and you have to get the OK from the Community Care Licensing Division of the Department of Social Services. That alone takes six to 12 months, and that’s only if you have the money to be able to close that classroom and pay for those renovations and then have new kids ready when you reopen.” Many operators decided it was easier to shut down, she said.
More importantly, Buthee said, the economics of child care centers rely on older 3- and 4-year-olds, who are cheaper to care for. State regulations require one teacher for every three or four infants or toddlers. For 4-year-olds, there is one teacher for every 12 children.
According to Buthee, most child care centers run their programs for low-loss babies and offset that with revenue from their preschoolers. “When you lose these preschoolers, there’s no way to compensate,” Booty said. “The whole business model is completely falling apart.”
Los Angeles officials are aware of the problems. “The expansion of transitional kindergarten in California has many benefits as well as unintended consequences,” a spokesperson for the Los Angeles County Department of Public Health’s Office of Advancement in Early Care and Education said in an email. This service seeks to help childcare and early education operators navigate the challenging market and has published a new travel guide financial and business resources in October 2025.
One clear lesson, according to both Fuller and Butty, is to allow community child care centers to be part of expanding publicly funded preschool programs, not just public schools. That way, instead of losing children and revenue, these centers can retain older children and continue to operate. When Oklahoma expanded its preschool program in 1998, the state also experienced widespread closures of existing centers. Then Oklahoma decided to open up funding to community providers. Both Fuller and Butty praised New York for including community centers in its pre-K expansion from the start. Still, there were problems there too. As government subsidies increased for 4-year-olds, slots for babies and toddlers it shrinks.
Fuller remains a supporter of early childhood education and agrees that middle-class families need relief from child care costs, but he warns that there can be harmful consequences when well-intentioned ideas are poorly implemented.
Education systems are complex and when you deal with one small part it can have a ripple effect. Fuller has no quick fix. Policymakers must balance the sometimes conflicting goals of improving education for low-income children and offering relief from high child care costs. There is no universal answer.
Contact the staff writer Jill Barshay at 212-678-3595, jillbarshay.35 at Signal, or barshay@hechingerreport.org.
