How much are states investing in early education? To find out, Child Care Aware® of America (CCAoA) took a close look at fiscal year (FY) 2026 state funding for child care and preschool. We focused specifically on dollars beyond federally required matching and maintenance of effort (MOE) funds (learn more about federal child care funding). Budget and policy experts from 44 states and Washington, D.C., responded to our survey. This report not only updates our 2025 findings, but also highlights year-over-year trends for states with both 2025 and 2026 data, showing progress and gaps.
Here’s what we learned:
- There remains an uneven playing field for state child care and preschool funding. In FY 2026, per-child investments ranged from under $500 to more than $5,000 for children under age five, with Washington, D.C., standing far apart, investing over $9,800 per child. At the other end of the spectrum, seven states (Arkansas, Idaho, Missouri, Nevada, Rhode Island, West Virginia, and Wyoming) put in no additional dollars beyond what is federally required. Across states reporting FY 2026 data, the average investment came in at $1,575 per child, highlighting just how wide the gaps remain.
- Some states are stepping up, with year-over-year increases in child care and preschool funding. In 20 of the 26 states with data for both years, per-child investments in child care and preschool rose from FY 2025 to FY 2026. On average, spending increased from about $1,400 to $1,700 per child under age five.
- Early childhood funding still lags far behind where it should be. In FY 2026, California had the highest per child investment with $5,994 per child, yet that amount is lower than all but seven states’ per child K-12 spending in FY 2023. This gap matters especially for young children. Birth to age 5 is a period of rapid brain development and learning, and underinvesting during this important window creates a missed opportunity for children’s long-term success.
- The current funding system is complex and fragmented. Child care and preschool funding is often scattered across multiple agencies and braided together from state and federal sources. This limits transparency and accountability
Here is what we recommend:
- Increase Investments: States need to invest more in child care and preschool. This would lead to lowering costs for families, supporting the workforce, and expanding access to high quality programs.
- Improve Transparency: Policymakers should make funding easier to track and understand. This will allow everyone to see how investments are made and where gaps remain.
- Strengthen Coordination: A more unified system can work more efficiently and better serve children and families.
Early childhood is the foundation for lifelong learning and success. States have made progress, but the data show there is still more work to do to ensure every child has access to affordable, high-quality early education.