Q&A: How California Funds Universal Transitional Kindergarten

Publicly funded child care promotes the healthy development of children and supports families in attending school, work, or other caregiving responsibilities. There are multiple reasons why families seek child care and a number of factors involved in deciding on a preferred child care setting. These decisions are shaped by both personal and societal factors, and access to the preferred setting can directly affect a family’s ability to attend work or school. To help ensure that California families have access to the type of care that works best for them, the California Department of Social Services (CDSS) offers a range of child care and development programs. These programs are available at low-to-no cost for eligible families across multiple settings: 1) licensed child care centers (LCC); 2) licensed family child care homes (LFCH); or 3) family, friend, and neighbor provider (FFN).

Given families’ unique needs and preferences, this diversity of child care options is critical. Moreover, in recent years, enrollment in CDSS child care programs has grown, providing an opportunity to better understand the child care preferences of California’s families. Given recent federal and state threats to child care, the following Five Facts offer critical insights for strengthening child care in California and underscore the importance of continuing to expand access to California’s publicly funded child care programs across all settings in our mixed delivery system.

1.  California families using publicly funded child care are increasingly choosing family, friend, and neighbor care.

Largely driven by  Governor Newsom’s 2021-2023 expansion of publicly funded child care, enrollment in CDSS child care programs increased between 2021 and 2024. By setting, enrollment across LCCs, LFCHs, and FFNs have all increased over time, but at different rates. Namely, as shown in the chart below, families are enrolling in FFN settings at a higher rate than LCCs and LFCHs. Notably, FFN enrollment has increased by over 100%, while LCC and LFCH increases were both around 65%.

These data show that California families value FFN care. This notable increase in FFN utilization may reflect a number of contextual factors, including the need for trusting care that is close to home. Moreover, a 2021 report from the Bipartisan Policy Center showed that FFN care is not a ‘last resort’ option for families. Specifically, 57% of surveyed parents using FFN care stated that they would continue to use it, even if formal care were free and convenient. Many parents value trust and safety when selecting the best child care option for their family, which often means FFN care.

What I like most is that the provider is my friend and she treats my daughter like her own which makes me feel comfortable.” – Parent of a toddler in FFN Care¹Quotation collected through research conducted by the Child Care Resource Center as part of the Home-Based Child Care in Los Angeles County report, funded by First 5 Los Angeles.

2. Most children in California’s publicly funded child care are in home-based settings, with trends varying by age and race.

In 2024, two in three California children in publicly funded child care were enrolled in home-based settings.²Data for California includes CalWORKs Stage 1 data, but data disaggregated by age or race and ethnicity do not include Stage 1 due to data limitations. Parents’ and caregivers’ choices varied by the age of the child. Two-thirds of children under age two were in home-based care, either with an FFN provider (22%) or an LFCH (44%). School-age children were also more likely to receive home-based care than center-based care. Nearly 90% of children aged 13 or older with exceptional needs remained in home-based care. Conversely, children ages two to four were more likely to receive center-based care than children of other ages, particularly two-year-old children. For example, 45% of two-year-olds received care from licensed centers, compared to 32% of six-year-olds and 14% of twelve-year-olds.

In October 2024, three in four Black children in California received publicly funded child care in home-based settings, with 39% cared for by FFN providers and 34% in LFCH settings. Similarly, two in three Latinx children received care in home-based settings: 26% with FFN providers and 43% with LFCH providers. Asian, multiracial, and white children were relatively more likely to enroll in center-based care, but even so, at least 50% of these children received care from an LFCH or an FFN.

Child care settings for families of color in California are aligned with recent research on families’ needs and preferences. For example, Black and Latinx parents with young children are more likely to work outside of “traditional” hours or on the weekends, which lends itself to FFN or LFCH care. In addition, Black and Latinx parents value providers with similar cultural backgrounds. In California, home-based providers are more likely to be Black and nearly half are Latinx. Finally, parents who use FFN care rate “language spoken” as an important factor in choosing their child care provider, which may explain why Latinx families who are more likely to speak a language other than English at home choose a home-based provider.

3. CalWORKs Stage 1 families are most likely to use family, friend, and neighbor care.

Families accessing CDSS child care through CalWORKs or the Alternative Payment (AP) program can access care across FFN, LFCH, and LCC settings, whereas families enrolling in General Child Care (Title 5 programs, including Family Home Education Networks) can only access LCC and LFCH providers. Notably, nearly 50% of CalWORKs Stage 1 families utilize FFN care while AP program families are most likely to access LFCH (44%).

CalWORKs Stage 1 families must be recipients of California’s cash aid program, and many of these families are just beginning welfare-to-work activities. These families can remain on Stage 1 child care until the family is considered stable at which point they transition to Stage 2 child care. As a result, many of these families may require care at non-traditional hours, given the dynamic nature of finding a job and the prevalence of “gig work” among people with low-incomes. A 2021 report from the Urban Institute on non-traditional hours reported that families requiring care during non-traditional hours are more likely to use FFN care, reflecting the importance of this option for CalWORKs Stage 1 families. 

4. The majority of California counties saw large increases in family, friend, and neighbor care.

From 2021 to 2024, just over 158,000 additional children received publicly funded child care in California — an increase of 77% statewide, ranging from a 160% increase in Santa Barbara County to a 1% increase in Mariposa County. The increase in enrollment was driven by the 115% increase in children receiving care from FFN providers. In fact, in 48 out of 58 counties, enrollment in FFN settings increased more than in LFCHs or LCCs. This increase in FFN enrollment was greatest in Riverside County, which saw a 504% increase in FFN care enrollment. The northern California counties of Napa, Mendocino, and Tehama also saw a more than 300% increase in FFN enrollment. Mariposa County was the only county that experienced a reduction in FFN enrollment during this period (-7%).

​Enrollment in LFCH settings increased by 67% from 2021 to 2024 across California. In six counties, LFCH enrollment increased more than in FFN or LCC settings, including a 167% increase in LFCH enrollment in Sacramento County. No counties experienced a reduction in LFCH enrollment during this period.

Finally, LCC enrollment in California increased 62% over this three-year period. Four counties, including Imperial, Mariposa, Monterey, and Plumas, saw the largest increase in enrollment in publicly funded child care in LCCs, relative to other settings, ranging from 180% in Plumas County to 7% in Mariposa County. Mono, Siskiyou, and Tulare Counties saw a decrease in LCC enrollment. In very rural counties, decreased enrollment could result from the closure of just one or two providers in the community.

5. Licensed family child care homes had the highest share of enrollment in half of all California counties.

The most common setting in which children received publicly funded child care varied across California counties. Families weigh a complex set of factors when deciding who will care for their child while at work or school. These factors may include safety and quality, cultural or linguistic preferences, and practical considerations such as location, hours, and the cost of care, among other factors. In half of all counties, LFCHs were the child care setting with the largest share of children enrolled in October 2024. Colusa, Glenn, Monterey, Plumas, and Santa Cruz Counties all had more than 70% of children receiving publicly funded child care in an LFCH setting.

LCCs were the most prevalent setting in 19 California counties, including many in the Bay Area and the Lake Tahoe and Sierra regions. Alpine, El Dorado, and Orange Counties all had 60% or more of children receiving publicly funded child care in an LCC setting.

Furthermore, 10 California counties – including Los Angeles, which is home to one-quarter of all Californians – had the largest share of children receiving publicly funded child care in FFN settings. In addition to Los Angeles, these other counties are primarily located in California’s Central Valley and parts of the Inland Empire. Despite the large increase in FFN enrollment from 2021 to 2024 statewide, the share of children enrolled in FFN care in most counties — even in counties where it is the most prevalent setting — remained relatively low compared to LFCH and LCC settings combined. The county with the highest share of FFN enrollment was Lassen County, where 55% of children were in FFN care.

Implications & Policy Recommendations 

The preceding Five Facts highlight the importance of ensuring access to child care across all settings, particularly given distinct family preferences by race and ethnicity, age of child, and county of residence. As California decisionmakers continue to grapple with the shortage of publicly funded child care and look for solutions to expand access, the following implications are important to consider.

California is facing an uncertain fiscal future, but investments in child care must remain a priority to support the well-being of families and the state’s economy. These investments must center parent choice, value fair pay for providers offering care in every child care setting, and protect all dollars appropriated to child care.

California’s state leaders acknowledge that child care is a key driver of unaffordability and is critical for children’s healthy development and a strong state economy. Among these state leaders is Governor Gavin Newsom, who made a promise of expanding affordable child care to more than 200,000 children, stating that this expansion “will help reinvigorate our essential care economy and invest in the health and well-being of families across the state.” Despite this promise, the state has indefinitely paused funding for this expansion, which was set to add around 129,800 new subsidized child care spaces for California families. However, the demand for publicly funded child care continues to far exceed the supply, leaving hundreds of thousands of families to continue to face unaffordable costs. The pause on expanding child care spaces only exacerbates this challenge. In light of this policy context, the proceeding narrative explains: a) Why publicly funded child care is critical; b) The gap between the number of children eligible for child care programs and the number enrolled; and c) Implications for underfunding California’s child care programs.

1. Without access to publicly funded spaces, child care is unaffordable for hundreds of thousands of California families.

Publicly funded child care (i.e., subsidized child care) provides low- or no-cost care for families with low incomes and/or families who meet need-based qualifications. When eligible families cannot access publicly funded child care, they are met with unsustainable costs that negatively impact their economic security. As shown in the chart below, a single mother with a school-age child and an infant will spend 63% of her income on child care without access to a state subsidy. Accessing publicly funded child care likely eliminates all child care costs, thus allowing her to focus her resources on housing, food, and other basic necessities. Specifically, in 2024:

• A typical single mother in California with children had an annual income of $47,062. After paying for child care for her infant and school-age child, she was only left with $17,609 from her annual income.
• If she had access to a subsidy for both her children, her child care costs would have been covered, saving her $29,453 annually for basic necessities for her family.
• Additionally, a typical single father in California would spend 43% of his income on child care for his school-age child and infant, far exceeding federal affordability guidelines of 7%.

2. Underfunding child care programs negatively impacts children of color.

Historic and systemic racism has created racial inequities throughout California, in which families of color face structural barriers in their path toward economic mobility. For example, harmful “welfare” stereotypes in the 1980s and 1990s perpetuated a myth that families of color were not “deserving” of assistance, prompting ineffective policies that prioritize work over well-being. Moreover, persistent income inequality reflects racial disparities in unemployment and access to wealth, impacting economic opportunities for Californians of color. The state’s current child care policies continue to uphold this harmful legacy.

The chart below shows that children of color — particularly Black, American Indian/Alaskan Native, and Latinx children — are disproportionately eligible for publicly funded child care. Therefore, when demand for child care outpaces supply, relatively more children of color are unenrolled, forcing their families to either pay unsustainably high costs for child care, quit their jobs, or find other solutions that inevitably strain family resources. Failing to expand access to publicly funded child care only exacerbates existing racial inequities embedded in our current state policies and landscape.

3. Overall, while the unmet need has improved over the past three years, only 16% of eligible children are enrolled in child care programs.

In other words, only 1 in 6 children eligible for child care actually receive care through programs administered by the California Department of Social Services. While this number has improved from the unmet need percentages of 14% in 2023 and 11% in 2022, programs remain severely underfunded. As a result, approximately 1.8 million children eligible for care are not enrolled, likely leaving tens of thousands of families on long waiting lists, unable to access affordable care and forced to choose between going to work and caring for their child. This challenge has been highlighted by parents and caregivers across the state, as shown in the parent quotation below from the California Assembly Blue Ribbon Commission on Early Childhood Education –- Parent Voices’ Parent Recommendations Report.

“And a lot of parents [quit their job] because I think they’re at their end. And they’re like, ‘I thought I could figure out child care without the subsidy with all this.’ Because I was gonna go back to work. But then they realized it cost so much money. That they would actually go into debt with their job. And that’s where I was at.”

4. Enrollment increases have been slower for infants/toddlers and school-age children.

When looking at the unmet need by age group for 2024 compared with 2022, the strongest growth in enrollment has occurred for preschool-age children (ages 3 to 5). While there have been increases for infants/toddlers (ages 0-2) and school-age children (ages 6-12) over time, they have trailed the rate of preschool-age growth. These trends reflect recent research from the Public Policy Institute of California, showing that infant care is harder to find. In a survey of child care navigators, only 31% of respondents said families were able to find affordable infant care, compared to 77% for preschoolers.

5. Rural and agricultural counties have relatively higher levels of unmet need for publicly funded child care.

Unmet need varies widely across counties in California, with San Francisco having 34% of eligible children enrolled while Madera County has only 10% — one of the lowest in the state. One clear trend is that rural counties have relatively fewer children enrolled as a percentage of eligible children. This is particularly acute for counties in the Far North (as shown in the county map). Moreover, counties with an agricultural focus also have a relatively higher unmet need. Previous research in rural Monterey County identifies specific barriers that families working in the agricultural sector face when accessing child care, underscoring this regional trend. This is further supported by parent testimony from the Assembly Select Committee on Child Care Costs, in which a father from the Central Valley stated:

“To be able to go to work and leave my son in good care, it was hard to find a provider. We looked and we didn’t have many options. In particular, for a night shift. Because for packers we can work night hours, and it’s really hard for us to find a person to watch my son.”

Implications for Programs, Families, and Children

The unmet need for child care remains alarmingly high. With the Newsom administration walking back plans for expanding the number of subsidized child care spaces, families and children will continue to face unnecessary challenges with meeting basic needs. Key implications include:

• Families will continue to languish on the waiting list. While the state does not have a centralized eligibility list to confirm the exact number of families on local waiting lists, with nearly 1.8 million eligible children in California not enrolled, there are most likely thousands and thousands of families waiting to access a subsidy. With the state suspending progress on expanding publicly funded child care, families on this “no hope list” are not going to see relief.
• California’s affordability challenges will remain unaddressed, threatening to increase the state’s poverty rate. California has the highest poverty rate in the nation (tied with Louisiana), with the percentage of people in poverty dramatically increasing since the expiration of pandemic-era policies in 2021. In particular, the child poverty rate has experienced an alarming increase from a historic low of 7.5% in 2021 to 18.6% in 2024. Failing to expand publicly funded child care will only contribute to (instead of reversing) this harmful trend.
• Harmful federal cuts to health care and food assistance will only make child care more unaffordable. The harmful Republican megabill (H.R. 1) that passed during summer 2025 will take health care and food assistance away from millions of Californians. These cuts will tighten families’ budgets thus increasing the urgency for expanding the number of subsidized child care spaces. For families with young children, the negative impacts of H.R. 1 will run even deeper without access to affordable child care.

Given these implications for California families — and the positive effects of child care on the state’s economy —  state leaders should fulfill their promise to expand publicly funded child care. Doing so would help to combat California’s affordability challenges and impending harms from the Republican megabill, H.R. 1. Fully funding the promised child care spaces would move thousands of families off waiting lists, putting California on a stronger path to address affordability challenges and longstanding inequities.

Kristin Schumacher is a former analyst at the California Budget & Policy Center and now serves as a consultant on various research projects for the organization.