Building Better Preschools: A Step-by-Step Guide to Balancing Funding and Quality

Introduction

As states invest record amounts in preschool programs, the gap between funding and quality is widening. More four-year-olds than ever are in state-funded preschools, yet experts warn that without careful attention to quality, we risk creating a two-tiered system: high-quality programs for some and subpar experiences for many. This guide, based on findings from the National Institute of Early Education Research (NIEER) 2025 Yearbook, provides a clear path for policymakers, advocates, and educators to assess current preschool investments, identify quality gaps, and take actionable steps to ensure every child benefits from a strong early start.

What You Need

• NIEER's State of Preschool Yearbook (2025 edition) – available online at nieer.org
• Your state's preschool budget data – from state department of education or budget office
• Inflation calculator (e.g., U.S. Bureau of Labor Statistics CPI tool)
• Enrollment figures for 3- and 4-year-olds in your state
• Quality benchmark criteria – including teacher-to-child ratios, teacher compensation, curriculum standards, and class size
• Stakeholder input – from educators, parents, and advocacy groups

Step-by-Step Guide

Step 1: Review the National Landscape

Start by reading the latest NIEER report to understand nationwide trends. Note that total state funding hit nearly $14.4 billion in 2024-2025, an all-time high, but enrollment also peaked. However, spending growth slowed dramatically – the per-child increase this year was only $45 (adjusted for inflation), compared to a 16-times larger increase the year before. California, New Jersey, and New York alone accounted for 45% of all state pre-K spending. This step gives you context: some states are racing ahead, others are stumbling.

Step 2: Assess Your State's Per-Child Spending

Using state budget data and enrollment numbers, calculate your state's spending per child enrolled in preschool. Compare this to the national average and to top-performing states like New Jersey (over $15,000 per child) or California (over $10,000). Adjust for inflation using the CPI tool to see real changes. The report found that 17 states actually spent less per child in 2024-2025 than the year before when adjusted for inflation. If your state is among them, this signals a need for course correction.

Step 3: Evaluate Enrollment and Access

Look at the percentage of 3- and 4-year-olds enrolled in state-funded preschool. Do not just count total numbers – examine whether enrollment is growing, stagnating, or declining. Falling enrollment, as noted by researchers, can reduce political pressure but also leaves children behind. Compare your state's enrollment rates to NIEER benchmarks. If access is low, even generous per-child spending means many families miss out. Remember: “If providing high-quality preschool to all 3- and 4-year-olds were a race, some states are nearing the finish line, others have fallen behind, and a few have yet to leave the starting line.”

Step 4: Check Quality Indicators

Funding alone does not guarantee quality. Use the NIEER quality checklist: teacher-to-child ratios, teacher educational requirements, professional development, curriculum alignment, and class size. Also examine teacher compensation – a long-standing concern. Compare your state's policies to those in high-quality states. For example, New Jersey invested an additional $100 million despite a budget deficit, using those funds to expand programs and improve teacher pay. Ask: are we spending on things that directly improve classroom experience?

Step 5: Analyze Funding Allocation and Priorities

Break down your state's preschool budget. Is the money being directed toward expanding access, improving ratios, raising teacher salaries, or a mix? The report shows that while many states increased spending, the rate of increase is slowing, and deficits are often cited as a reason. Yet New Jersey's example proves it's a matter of priorities. As NIEER director Steve Barnett said, “That's a conscious decision to say we're going to spend less.” Use this step to identify where your state is choosing to invest or cut.

Step 6: Identify the Haves and Have-Nots

Look for disparities within your state – urban vs. rural, wealthy vs. low-income communities. The report warns that without a broad quality focus, we risk creating a system where some children receive excellent preparation while others get minimal support. Map your state's funding distribution and program quality across different regions. This step helps target interventions where they are most needed.

Step 7: Develop an Action Plan

Based on your findings, create a plan that addresses both funding and quality. Prioritize actions such as:

• Increase per-child spending at least to the national average, adjusted for inflation.
• Set mandatory quality standards (ratios, teacher credentials, curriculum).
• Allocate dedicated funds for teacher compensation increases.
• Expand outreach to underserved families to boost enrollment.
• Establish a monitoring system with annual reporting.

Use the NIEER yearbook as a benchmark annually to track progress.

Tips for Success

• Don't separate access from quality. As NIEER's Allison Friedman-Krauss emphasizes, “Right now, it's more about access. And we don't want them to forget about quality.” Ensure new programs meet high standards from day one.
• Learn from top performers. Look at how New Jersey maintained investment despite deficits – it's about political will and long-term vision. California's $4.1 billion spend shows that large-scale investment can drive access, but still watch ratios and teacher pay.
• Use inflation-adjusted data. Nominal increases can be misleading. The nearly $14.4 billion figure sounds huge, but per-child growth is modest. Always adjust for real purchasing power.
• Engage stakeholders early. Include educators, parents, and early childhood experts in your assessment. Their on-the-ground insights will reveal hidden quality gaps.
• Avoid a race to the bottom. Don't expand enrollment so fast that quality suffers. It's better to have fewer high-quality slots than many low-quality ones. Aim for the “race” where all states cross the finish line together.