Early Childhood

A FOCUS ON EARLY LEARNERS

2024 State Budget Analysis

Michigan’s earliest learners deserve the opportunity to set their educational journey on the best path. At the same time, parents rely on our early childhood education systems, including child care and pre-K programs, to ensure their children are kept safe and are well taken care of while they work or go to school. Michigan’s state budget helps families with low and moderate incomes afford child care and preschool programs, and the governor is pushing forward with her goal toward providing universal access to state-funded preschool programs, regardless of income. However, there is a concern that this will destabilize our early childhood system, especially our child care providers, potentially increasing costs on our families with the youngest children and making access for families with low incomes more difficult. While the 2023-24 budget takes just the first step toward this goal, more work needs to be done to fully address the cost of caring for and educating our youngest learners.

Federal aid through the American Rescue Plan Act (ARPA) allowed Michigan to make two years of historic investments in our child care subsidy program. While that money is scheduled to be fully used up by the end of the 2022-23 budget year, with the potential to revert back to policies that did not address the scope of need and inadequately reimbursed providers for the cost of care, ongoing increases in federal funding used to support the child care subsidy program will help alleviate some of the backslide. 

The 2023-24 budget aligns with the governor’s recommendation with an adjustment in the appropriation amount and includes an additional $166.9 million in federal aid that will help provide the following:

• Maintain entrance income eligibility thresholds at up to 200% of the federal poverty level. Families of four making up to about $55,512 per year (2023 levels) qualify for child care assistance through the subsidy program.
• Maintain ongoing reimbursement rate improvements as compared to pre-pandemic rates. This includes a 30% ongoing rate increase relative to pre-pandemic rates, but removes the temporary rate increases that had been provided by available ARPA funding. Therefore, providers are expected to see reductions in rates between the close of the 2022-23 budget and the beginning of the 2023-24 budget.
• Improve payments to providers by providing reimbursements based on enrollment rather than attendance. This will help smooth out payments for providers and allow for some consistency in budgeting.

The 2023-24 budget increases funding for the Tri-Share Child Care Program by $900,000—in alignment with the governor’s recommendation—to total $3.4 million.The Tri-Share Child Care Program intends to help make child care more affordable by splitting the cost of care equally between the employer, the parent/guardian employee and the State of Michigan. The Tri-Share program is active in key regional hubs, specific counties, and Detroit, and employers have to opt-in to voluntarily participate in the program. 

Continues Expansion of the Great Start Readiness Program (GSRP), the state-funded 4-year-old preschool program. During Gov. Gretchen Whitmer’s 2023 State of the State address, she proposed moving the state toward universal state-funded preschool programs for all Michigan 4-year-olds. However, this must be done in a strategic way to not exacerbate the early childhood workforce crisis and to not destabilize our early childhood education and care system. The final budget increases the GSRP by $90.9 million. This takes the next step moving toward a universal preschool program, largely in alignment with the governor’s proposal with some noted differences, by doing the following:

• Expand income eligibility to up to 300% of the federal poverty level (and up to 400% in certain areas already covering all eligible kids);
• Increase the full-day per-child payment from $9,150 to $9,608 (half-day per-child payments from $4,575 to $4,804). This aligns the full day payment with the K-12 foundation allowance payment; 
• Increases the allocation for transportation by $18 million to increase the per-child allocation from $300 to $500.
• The final budget also creates GSRP extended programs (programs that expand the number of days and weeks offered by the program to operate for the same length as first grade programs) and funds them at $11,530 per child. The governor’s budget had recommended this be a grant-based program in a proposed current year supplemental. Instead of including it in the supplemental, the final budget moves it to the 2023-24 budget and operates it as a per-child allocation rather than a grant-based program.

Provides one-time funding for a 3-year-old GSRP pilot program. In alignment with the governor’s budget recommendation, the final budget includes $18 million over three years to Clinton County Regional Educational Service Agency for a 3-year-old preschool pilot program to provide services to children who meet the eligibility criteria for GSRP, but who are 3 years old. This will maintain and improve funding for current year programs being funded through a one-time grant of $2.2 million.

Current year supplemental funding to help study and market GSRP. The final budget includes a current year supplemental to help evaluate, market and start up new GSRP classrooms, including the following:

• Increasing the allocation for a GSRP longitudinal evaluation by $150,000, for a total of $500,000;
• Includes $35 million in one-time funding—less than the $50 million recommended by the governor—for GSRP classroom start-up grants. The program would provide grants of up to $25,000 for each new or expanded GSRP classroom for costs associated with attracting, recruiting, retaining and licensing required staff; supporting facility improvements or purchasing necessary facility space; outreach material for public awareness; and improving a providers rating.
• Provides $5 million in one-time funding—half of what the governor’s budget proposal recommended—for a consortium of Intermediate School Districts (ISDs) to partner with the Michigan Department of Education and community-based organizations to implement a multi-year statewide awareness campaign about the availability of services through GSRP.

Takes steps to start addressing the early childhood educator workforce crisis. While the final budget does not include the governor’s recommendation for an early childhood educator tax credit, which would have provided an annual tax credit ranging from $1,000 to $3,000 to about 15,000 qualifying early childhood educators, the final budget does include $30 million—down from the governor’s recommended $50 million— in a current year supplemental for an early childhood workforce project. This is intended to assess early childhood workforce needs; promote clear career pathways; align professional development, certificates and degrees; develop alternative training programs; and pilot recruitment and retention projects.

Supports interventions for our earliest learners. The final budget includes:

• Increasing funding for early identification and intervention for younger children through Early On by $1.1 million, from $21.2 million to $22.3 million. This is in alignment with the governor’s recommendation.
• Increases funding for evidence-based home visiting programs that encourage strong family relationships and provide support to those with young children by $1 million—half of the governor’s recommended increase—to $3.5 million total.
• Increase funding for the Great Start Collaboratives (GSCs) through the Early Childhood Block Grants by $5 million, which is less than the governor’s recommendation of a $7.5 million increase, to expand enrollment efforts in state early education programs. The total funding for home visiting (see bullet above) and support for the GSCs would increase by $6 million to $19.4 million.