Amendment would shift UPK private-provider payments into childcare assistance program; lawmakers seek fiscal study

A committee amendment discussed March 1, 2025, would preserve eligibility and regulatory standards for universal prekindergarten (UPK) but change the funding pathway for families who choose private prequalified providers: the Department for Children and Families (DCF) would pay tuition for up to 10 hours per week from the state portion of childcare assistance funds, rather than having that 10-hour amount flow through school district budgets and the education fund.

Beth St. James, education policy attorney with the Office of Legislative Council, told the House Human Services Committee the amendment "does not change eligibility requirements or the amount of funding. It changes the source of funding." The amendment would leave public-school UPK funding in the education fund and move the state-funded payment for private prequalified providers into the Child Care Financial Assistance Program (CCFAP) pool for a state-funded portion of that program.

Why it matters: committee members warned the amendment could preserve or even widen current inequities in access to prekindergarten because it changes funding flows without assigning responsibility for universal access to school districts. Lawmakers sought clarification about tuition-setting, enrollment rules and how different funding streams (education fund, CCFAP federal block grant and state match) interact.

How the program works now: under the current statute (16 V.S.A. a7 829) every child aged 3 or 4 who is not yet in kindergarten is eligible for up to 10 hours per week of publicly funded prekindergarten education. Parents may enroll in a school district'run pre-K program or in a prequalified private provider; if the school district pays for a private slot the payment is currently part of the school district'level funding and counts toward average daily membership used in the education funding formula.

What the amendment would change: the amendment (as presented to the committee) removes references to tuition payments from school districts to private prequalified providers and creates a companion provision in Title 33 to allow DCF to pay tuition to private prequalified providers for no more than $10 per week for 35 weeks annually from the state portion of CCFAP appropriations. The amendment also requires DCF to enter into an agreement with each prequalified private provider on quality assurance and notification requirements and to establish a tuition payment schedule "that does not inhibit the ability of a parent or guardian to enroll a pre K child in a private pre kindergarten education program, or the ability of a prequalified private provider to maintain financial stability."

Questions raised in committee: lawmakers and counsel asked about multiple details the amendment did not resolve: - Who sets the tuition payment amount for private UPK providers and how will that compare to existing payments for public-school slots? The amendment instructs DCF to pay on a schedule but does not set a specific rate; committee members asked whether DCF or another office will set the level. - How would use of CCFAP'designated funds affect eligibility and reporting, given that a significant share of CCFAP dollars are federal with constraints on use? Counsel told the committee the amendment specified the payment must come from the state portion of CCFAP funding (state match/general fund and the state payroll childcare contribution), not the federal block grant portion. - Could families still combine UPK and CCFAP subsidies? Counsel and DCF staff said the correct version of the amendment would allow families to use both UPK and CCFAP benefits where income eligibility for CCFAP applies, but the committee sought a corrected draft to remove a contradictory line that had appeared in an earlier posted version. - How will counting for average daily membership (ADM) and education funding be treated if UPK tuition for private slots no longer flows through school district budgets? Beth St. James explained the amendment changes which students are counted by school districts for ADM: districts would continue to count pre-K children for whom they operate or pay tuition to a public school, but children whose 10 hours are funded by DCF to private providers would not be counted in district ADM in the same way.

Fiscal and policy next steps: Emily Byrne of the Joint Fiscal Office (JFO) told the committee JFO will prepare a more detailed study and flowcharts to document how federal, state and education-fund dollars move through the system and to show the fiscal impacts of changes. "The flowchart you've asked for... would probably be, like, page 3 of the report I plan on writing this summer," Byrne said. Lawmakers flagged that a fuller fiscal analysis is needed before adopting the amendment given the close ties between UPK funding, district budgets, property tax calculations and federal childcare funding rules.

Equity concerns and local effects: members raised local-equity concerns repeatedly. Several legislators noted that school districts that currently choose to offer more than 10 hours of UPK (for example, some full-day district programs) effectively provide a larger public benefit that is paid through the education fund and shared by all taxpayers; moving 10-hour private slots into CCFAP does not address those disparities and could shift which taxpayers and programs bear costs. Representative Bishop and others cited Winooski as an example: some districts offer full-time pre-K funded through their school budgets, while families elsewhere must rely on private providers and would receive the 10-hour payment through the DCF pathway under the amendment.

No committee votes were taken on the amendment; committee staff asked the sponsor to supply a corrected, clean version of the amendment that removes duplicated or contradictory lines and to provide clarification on tuition-setting and ADM counting. The committee scheduled follow-up testimony from the Department for Children and Families (Deputy Commissioner McLaughlin) and indicated the Joint Fiscal Office will prepare a report describing current flows and likely impacts.

Ending: Committee members said the amendment raises substantive fiscal and equity questions that require more staff analysis and a corrected bill draft; several members urged a visual flowchart and clearer tuition-rate language before moving forward.