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  • Dawn Alexander

CDEC Budget Updates

UPK Status

**Based on 1900 providers in 2023.

This chart has the potential to look VERY different in coming years if CDEC pursues lower ratios for UPK. ECEA does not argue that the lower ratios should not happen, only that they should not happen until we have Colorado specific data from community based programs and school districts to show that there is a need to move there. To date, NO research has been done in community based programs to show that the higher ratios are not working in support of children. They have been the standard for decades under private preschool offerings.

As of January 8, 2024, approximately 5,860 3-year-olds and 39,165 4-year-olds are enrolled in UPK. Of enrolled 3 and 4-year-old students, approximately 4,332, or 9.8 percent of enrolled students, have an Individualized Education Plan (IEP). To note: JBC called out the fact that UPK has cost more than twice that of the cost of CPP. The CPP program had served 36,000 slots, of which 8,000 were full day slots. Under UPK, we currently have 4,000 full day slots.

Per statute, payment for enrolled 3-year-olds is based on the total amount received by the provider during the FY 2022-23 school year through the Colorado Preschool Program (CPP). Providers receive a lump-sum payment for 3-year-old enrollment. Reimbursements for 4-year-olds are made on a monthly basis to providers based on enrollment data. Additionally, in the first year of UPK implementation, the Department is required to provide additional reimbursements to ensure providers’ allotments equal that of the historical allotment under the CPP formula.

The chart on the next page demonstrates current enrollment costs and estimated incremental costs of UPK, building on required payments for 3-year olds, 3-year-olds with IEPs, and estimated historical allotment payments. The increments above these required payments calculate provider payments as though all children were enrolled in only 10 hours of preschool with incremental costs calculated based on actual enrollment by number of hours and provider rates. This is to demonstrate the incremental costs of the additional hours of preschool. Estimates of incremental increases provided below include a 2.5 percent provider rate increase for all providers, and the different bars demonstrate the impact of different enrollment growth rates. This does not take into account new qualifying factors, nor does it take into account granular fluctuations of types of enrollment across the state but

rather assumes a straight line increase in enrollment. The blue indicates required expenditures for 3 year old's, 3-year-old IEPs, and 10 hours of preschool for all enrolled children. The orange hues demonstrate the incremental costs related to additional hours and remaining appropriations. With General Fund appropriations increasing only by inflation, the use of Preschool Programs Cash fund for other purposes reduces the Department’s ability to serve students with additional hours of preschool.

Section 26.5-4-209, C.R.S., which governs the use of the Preschool Programs Cash Fund requires the department to prioritize the preschool programs cash fund to provide funding for ten hours of voluntary preschool services per week, to provide funding for preschool services for children with disabilities, and to provide funding for preschool services for eligible children who are three years of age or younger as described in Section 26.5-4-204(3)(a)9III) and (3)(a)(IV), C.R.S. Statute says that remaining funding shall be used to provide additional preschool services for children who are in low-income families or who meet at least one qualifying factor, and in addition to that purpose, meeting the mandatory 10 hours and provision of services to eligible 3-year-olds and children with disabilities requirement, the department may use remaining money after to ensure the availability of quality,

voluntary preschool services provided through a mixed delivery system by means the department deems appropriate. This includes recruiting, training, and retaining professionals; expanding or improving the staff, facilities, equipment, technology, and physical infrastructure of preschool providers to increase preschool access; parent and family outreach; and “such other uses as are consistent with and further the purpose of the preschool program.”

Based on data provided by the department, more than sufficient preschool program cash funds are available to support the mandatory requirements of the provision of 10 hours of preschool services, the provision of service to children with disabilities and for eligible 3-year-olds or younger children. Therefore, staff believes the requested FTEs fall within the scope of use as described by statute to further the purpose of the preschool program. Staff recommends approval of the requested FTEs to support the UPK program but recommends $451,725 cash funds from the Preschool Programs Cash Fund to support the request. Staff’s recommendation differs from the request to account for centrally appropriated items which are typically not appropriated to departments in the first year for FTE.

Qualifying Factors Changes

According to statute, additional hours beyond the minimum requirement of 10 hours are subject to available appropriations and prioritized according to the following:

 Hours of preschool established by Department rule for threes who are low-income or meet at least one qualifying factor

 Continuation of service for children under three in school districts operating with a waiver, provided the

child is low-income or meets at least one qualifying factor

 Specified purpose, pursuant to 265-4-208(1)(d)

 Additional hours of preschool for four-year-olds who are low-income or meet at least one qualifying factor;

and in the event that appropriations are not sufficient, hours are prioritized for those students who are both low income and meet at least one qualifying factor.

Department rules establish the following as qualifying factors:

 Low-income (defined as less than 270 percent of the federal poverty guidelines)

 Non-English speaking family or student

 Individualized Education Program (IEP) for children with disabilities

 Foster care or non-certified kinship care

 Homelessness

The Department is in the process of finalizing rules which would add a new qualifying factor to the list: children of families living at 100% of the poverty level. This additional rule aims to target services for children most at risk of entering kindergarten without being prepared to learn. Research suggests that children of families that are considered low-income are at greater risk, and therefore the Department aims to address what it has learned is a gap in the current qualifying factors. The Department estimates it may serve an additional 2,900 children with full-day preschool as a result of the change, estimated to cost approximately $12.5 million.

1.0 FTE for anticipated waivers in first year.

March 13, 2024 JBC Hearing

JBC approved the IT request for UPK:

The following are ON HOLD until the JBC


Curious about Early Childhood Council funding? Here are the details:

During the discussion regarding UPK and Child Care Workforce, the topic of funding for the Early Childhood Councils surfaced. As a reminder, ECCs are not included in provider rate increases and, therefore, have not received permanent increases over time. The amount required to provide an increase for ECCs based on the 2.5 percent provider rate increase approved by the Committee would be $83,279 total funds. This funding could be provided with federal Child Care Development Funds without impacting the sustainability of the Child Care Development Funds.

Post-pandemic, ECCs received a significant influx of stimulus funds to expand existing programs ($2.0 million) and to implement new programs ($3.2 million). This funding roughly doubled the amount that councils receive to implement programs. The council budgets for FY 2024-25 will include $966,853 in CCDF stimulus funding to support the Child Care Resource and Referral and Family Child Care Navigator programs through 9/30/24. Additionally, the SLFRF funded Emerging and Expanding contracts will also continue through FY 2024-25. The chart below provided by the Department demonstrates the ECC funding in FY 2023-24 by fund source and whether it is base funding for the councils.

Funding for the Early Childhood Councils does not flow only through the Early Childhood Council line item in the Long Bill, but rather flow through other programs as well making historical funding very difficult to track. Staff is certain, however, the ECCs have not historically been part of the provider rate increases. Therefore, if the Committee would like to provide an increase in FY 2024-25, staff recommends the amount identified by the Department: $83,279 total funds. Staff also recommends this be provided through the federal Child Care Development funds.

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