Last week, I wrote about the Democrats incredible shrinking universal pre-k proposal.
In the first version of the proposal, which was printed in late September, the federal government would pick up 100 percent of each state’s universal pre-k costs for the first three years and then a declining percentage for the next four years. In the new version, which was printed earlier this month, the federal government would pick up a small fixed-dollar amount in the first three years, pick up a high and then declining percentage of costs for the next three years, and then pick up no costs in year seven.
| Year | Fed Contribution (1st Plan) | Fed Contribution (Current Plan) |
| 2022 | 100% of state costs | $4 billion |
| 2023 | 100% of state costs | $6 billion |
| 2024 | 100% of state costs | $8 billion |
| 2025 | 90% of state costs | 95.44% of state costs |
| 2026 | 80% of state costs | 79.534% of state costs |
| 2027 | 70% of state costs | 63.627% of state costs |
| 2028 | 60% of state costs | $0 |
The new universal pre-k program requires states to chip in far more than the first program, which will probably make it more difficult to get states to actually participate in the scheme. If states don’t participate, then the kids in their state won’t get the pre-k services that Democrats are promising them.
To get a sense of how minimal the funding of this program is in the first three years, I calculated how much money each state is likely to get in the first year based on the rationing formula spelled out in the bill. That rationing formula requires HHS to consider:
(i) the proportion of the number of children who are below the age of 6 and whose families have a family income at or below 200 percent of the poverty line for the most recent year for which satisfactory data are available, residing in the State, as compared to the number of such children, who reside in all States with approved plans for the fiscal year for which the allotment is being made; and
(ii) the existing Federal preschool investments in the State under the Head Start Act, as of the date of the allotment.
This wording gives HHS a lot of discretion in coming up with the various state amounts. This makes it hard to know exactly how much each state will get. But the first of the two considerations is easy enough to calculate.
For this calculation, I used the 2019 CPS ASEC and the 2019 HHS poverty guidelines to carry out the following steps:
- Calculate how many kids below the age of 6 live in families with incomes below 200 percent of the poverty line in all 50 states and DC.
- Use the numbers from (1) to determine what percentage of all kids who meet that criteria live in each state.
- Multiply $4 billion by the percentages from (2) to determine the total cash grant each state would get if all of them participated in the program.
- Calculate how many kids are preschool age (age 3 or 4) in all 50 states and DC.
- Divide the dollar amount from (3) by the number of preschool-aged kids in (4) to get a per-kid amount.
This is the result.
To be clear, this does not mean that, in the first year of the Democrats’ plan, every preschool-aged kid will get this amount of money as a tuition subsidy. The states are not instructed to give out the money equally to all users of preschool services. They are instead instructed to begin building out a universal free pre-k system.
What these per-child amounts show you is just how little universal pre-k could actually be built out with this money. If the national average cost of a universal pre-k spot under this plan is $10,000 per year (a very conservative assumption that is certainly too low), this plan, which nationally allocates $504 per preschool-aged kid in year one, would fund free pre-k spots for around 5 percent of kids.
In year two, the total grants rise from $4 billion to $6 billion, meaning all the numbers above increase by 50 percent. Instead of funding free pre-k spots for 5 percent of kids, it funds them for 7.5. percent of kids. In year three, the funding rises from $6 billion to $8 billion, or 10 percent of kids.