As transitional kindergarten increased, slots for 3- and 4-year-olds in public and private pre-K centers decreased

Fuller’s team also found that families in the highest-income communities were the most likely to apply for the new preschool seats at public schools. In the wealthiest fifth of ZIP codes of Los Angeles County, such as Brentwood, demand for public preschool skyrocketed 148 percent as families opted for a free program instead of paying as much as $36,000 a year for private preschool.

Meanwhile, enrollment rose just 50 percent in the poorest fifth of ZIP codes, where many families stuck with subsidized child care centers or relatives — especially since some public schools offered only a half-day option.

The full effect on the child care sector is still uncertain. California allowed child care centers that receive subsidies to retain their pre-pandemic budgets even as they lost 4-year-olds. That “hold harmless” subsidy is slated to end in July 2026, and more closures are expected to follow.

Policymakers hoped the new public school seats would free up scarce child care slots for younger children, as 4-year-olds flocked to the public schools. But there were many regulatory and financial hurdles that hindered pivoting to younger children.

“It’s not just flipping a switch to say this classroom is now going to serve 2- year-olds,” said Nina Buthee, executive director of EveryChild California, which advocates for publicly funded child care and early education. Operators need to reconfigure classrooms, install new sprinkler systems and hire a lot more teachers, Buthee explained.

“It’s a nightmare,” she said. “You need to get the OK by the fire marshal, and you need to get the OK by the community care licensing division of the Department of Social Services. That, in itself, takes six to 12 months, and that’s only if you have the money to be able to close that classroom and pay for those renovations, and then have new children ready for when you’re reopening.” Many operators decided it was easier to shut down, she said.

More importantly, Buthee said the economics of child care centers rely on older 3- and 4-year-olds, who are cheaper to take care of. State regulations require one teacher for every three or four infants or toddlers. For 4-year-olds, it’s one teacher for every 12 children.

According to Buthee, most child care centers operate their infant programs at a slight loss and offset that with revenue from their preschoolers. “When you’re losing those preschoolers, there are no funds to make up,” said Buthee. “The whole business model completely falls apart.”

Los Angeles officials are aware of the problems. ”The expansion of transitional kindergarten across California has many benefits, as well as unintended consequences,” a spokesperson from the Office for the Advancement of Early Care and Education within the Los Angeles County Department of Public Health said in an email. That office is trying to help child care and early education operators navigate the challenging market and published a new guidebook of financial and business resources in October 2025.

One clear lesson, according to both Fuller and Buthee, is to allow community child care centers to be part of the expansion of publicly funded preschool programs rather than just public schools. That way, instead of losing children and revenue, these centers can hold on to older kids and continue operating. When Oklahoma expanded its preschool program in 1998, the state also experienced widespread closures of existing centers. Oklahoma then decided to open funding to community providers. Both Fuller and Buthee praised New York City for including community centers in its pre-K expansion from the start. Still, there were problems there too. As public subsidies rose for 4-year-olds, infant and toddler slots shrunk.

Fuller remains a proponent of early childhood education, and agrees that middle class families need relief from child care expenses, but he warns there can be harmful consequences when well-intentioned ideas are poorly implemented.

Education systems are complicated and when you tinker with one small part, there can be a ripple effect. Fuller doesn’t have a quick fix. Policymakers have to balance the sometimes conflicting goals of improving education for low-income children and offering relief from the high cost of childcare. There’s no one-size-fits-all answer.

Contact staff writer Jill Barshay at 212-678-3595, jillbarshay.35 on Signal, or barshay@hechingerreport.org.