Q&A: How California Funds Universal Transitional Kindergarten

California has made a significant investment to expand access to early education by making Transitional Kindergarten (TK) available to all 4-year-old children. Understanding how those dollars are allocated to local communities can be complex, and this Q&A breaks down key funding aspects behind TK to help navigate that complexity. 

TK was first implemented in California in 2012 with the goal of providing preschool education for 4-year-old children who, based on the month they were born, were no longer eligible to enroll in kindergarten after the state adjusted the age cutoff for kindergarten admission. Until 2022-23, 4-year-old children were eligible for TK if they had their fifth birthday between September 2nd and December 2nd. 

Starting in 2021, California policymakers began a major expansion to make TK accessible to all 4-year-olds, thus rebranding the program Universal Transitional Kindergarten (UTK).¹Although TK expansion was initially introduced as “UTK” in the 2021-22 budget, this Q&A uses the shorter acronym, “TK,” to align with how state agencies currently refer to the program. UTK and Universal PreKindergarten (UPK) are related terms but refer to different components of California’s preschool system. UTK is the term that refers to the TK program at full expansion. UPK is an umbrella term that refers to all the preschool options available to families, including UTK, State Preschool, Head Start, district and local community-based preschool programs, early learning services for students with disabilities, private pay preschool, and expanded learning options to support access to a full day of services. By 2025-26, the program reached full expansion, with all 4-year-old children eligible for the program. This expansion has been backed by substantial state investment over the last few years.

How Much Is California Spending on Transitional Kindergarten (TK)?

Under the most recent estimates, TK spending reached approximately $3 billion ongoing starting in 2025-26, the first year of full expansion. This includes two key expansion policies:

• Increase in student attendance ($1.9 billion). This accounts for an increase in the number of four-year-olds participating in the program and their daily school attendance.
• Adult-to-Student ratio reduction ($1.1 billion). At full expansion in 2025-26, the law requires school sites to maintain staffing levels for TK at one adult for every 10 students (a 1:10 ratio). Districts must meet this ratio reduction requirement or face financial penalties.

In addition to those ongoing funds, the state has provided one-time resources to support various aspects of the program. The state provided nearly $1.2 billion between 2021-22 and 2022-23 in one-time dollars for TK planning and implementation grants, facilities, and efforts to support the preschool teacher workforce, with several of these grants also supporting the California State Preschool Program and kindergarten. Additional one-time grants were provided in the 2026-27 budget.

What Is Proposition 98 and How Does It Support TK?

Proposition 98 is a constitutional amendment adopted by California voters in 1988 that establishes an annual minimum funding level for schools and community colleges each fiscal year, commonly referred to as the minimum guarantee. The state fulfills this guarantee using General Fund dollars and local property taxes. Prop. 98 spending supports TK-12 schools, community colleges, county offices of education, State Preschool, and state agencies that provide direct TK-14 instructional programs.

To support part of the costs of TK expansion, policymakers gradually adjusted the minimum guarantee upward between 2022-23 and 2025-26. Generally, this means that a greater share of General Fund revenues is needed to meet the minimum guarantee, a process that is commonly referred to as “rebenching.”  This adjustment is driven by increased TK student attendance as part of the school funding formula. The ratio reduction policy (explained above) is also supported by Prop. 98 resources, but the minimum guarantee was not adjusted to include those costs. The most recent estimates for the first year of full expansion (2025-26) for increased attendance is $1.9 billion (as mentioned in the previous section), about 1.5% of the total Prop. 98 minimum guarantee for 2025-26.

How Many Students Participate in TK?

Enrollment has increased with expanded eligibility, growing from 116,786 in 2022-23, the first year of age eligibility expansion, to 213,313 in 2025-26, when all 4-year-old children became eligible. However, the share of eligible children who are enrolled  (i.e., the TK “uptake rate”) has declined across the expansion years. In 2021-22, before eligibility expanded, the uptake rate was 62%, declining to 52% by 2025-26, at full expansion.

How Does Funding for TK Adjust Based on Reported Attendance?

TK funding is governed by the broader school funding rules for all other grade levels. Generally, attendance is the key measure that generates funding for schools. During expansion years, the state estimated costs separately for TK in the annual budget, initially assuming all eligible children would attend, then adjusting those estimates once actual attendance was reported.

The most recent estimates suggest the state spent nearly $3 billion on TK in 2025-26. The table below compares cost estimates for the 2025-26 fiscal year between June 2025 and June 2026 based on most recent reported attendance numbers at each point in time. As attendance data was updated, the amount allocated to TK expansion decreased, and those reduced funds became available for other priorities.²During TK expansion years, 2022-23 to 2025-26, unspent attendance-related dollars from initial estimates went back to the General Fund for non-Prop. 98 purposes. Unspent ratio reduction dollars were made available for other TK-12 purposes. Starting in 2026-27, all unspent dollars from initial estimates across both policies will be made available for other TK-12 purposes.

How Does the State Allocate TK Funding?

TK funding is allocated to school districts through the state’s school funding formula, the Local Control Funding Formula (LCFF), which uses an attendance measure, Average Daily Attendance (ADA), to calculate funding. The LCFF is an equity-based formula that provides a per-ADA base grant per TK-12 student, which is adjusted by grade level spans. The formula also provides additional funds based on a school district’s enrollment of students in the foster system, students identified as English learners, students from families with low incomes, or students experiencing homelessness.

The per-ADA base grant for TK (and grades K-3) in 2025-26 was $10,256, as shown in table below, which is further adjusted to support districts in meeting average class sizes of 24 students or less. Based on a district’s overall enrollment of students classified as English learners, low-income, foster youth, or those experiencing homelessness, the per-ADA grant increases even more through two additional grants, the supplemental and concentration grants. Districts also receive an add-on of $5,545 per unit of TK Average Daily Attendance to maintain ratios of 1:10. The rates usually increase every fiscal year through cost-of-living adjustments.

How does TK Funding Address the Needs of Multilingual Learners?

While the LCFF is designed to provide additional funding to school districts that enroll students who are learning English, this requirement does not extend to TK. In 2024-25, the state removed a requirement to administer the English language proficiency assessment for TK students because it was not developmentally appropriate for this age group. Without assessment data, TK students who are learning English are not captured in the funding formula. To address this, policymakers included the following two items in the 2025-26 state budget:

• $10 million in one-time funds to the California Department of Education to adopt a screener to ensure TK multilingual learners are identified starting in 2027-28.
• Policymakers also allowed the use of the number of Kindergarten multilingual students as a proxy for TK students for purposes of the formula. The 2025-26 budget also provided $7.5 million in supplemental funds to mitigate funding losses resulting from the exemption of TK students from the English language proficiency assessment.

How Does Afterschool Funding Support TK Students?

Two main programs support TK students in elementary schools:

1. The Expanded Learning Opportunities Program (ELOP), established in the 2021-22 budget, provides funding for after school and summer programs for students in TK through sixth grade. Funding is allocated through a two-tier funding formula based on the number of students with the highest needs as defined in the LCFF. The annual state budget provides $4 billion for this program. The state currently does not report the number of students participating in this program by grade level; therefore, spending attributable to TK students is difficult to evaluate.
2. Additionally, the After School Education and Safety (ASES) program, created in 2002 through Proposition 49, also supports students in TK through ninth grade. The purpose of ASES is to support the creation of local after school education and enrichment programs. This program receives around $794 million annually, and is allocated to schools through a competitive grant process. Grants are based on a daily-student rate of $10.18 (2025-26). As with ELOP, data by grade level are not available.

Conclusion

California’s investment in TK expansion represents a significant step toward expanding access to preschool education for 4-year-old children. This Q&A highlights the following key points:

• The state adjusted the Prop. 98 minimum funding guarantee to support the costs of expanded TK enrollment.
• Funding to schools is allocated through an equity-based formula, but multilingual TK students are not yet fully captured by it.
• Expansion funding is regularly adjusted as school districts report attendance throughout the year.

Support for this report was provided by The Sobrato Family Foundation.