January 2026

Child Care and Preschool

2026-27 Changes in Child Care Spending

(In Millions)

  General Fund      
  Prop. 98 Non-Prop. 98 Prop. 64 Federal Total
Policy Changes          
Cost of care plus increase in lieu of COLA — $88 — — $88
Infrastructure grants for wildfire affected areas — — $12 — 12
General Child Care reductiona — 5 -26 -$2 -23
Subtotal (—) ($93) (-$14) (-$2) ($77)
Technical Adjustments          
Annualization of monthly cost of care plus payments — $197 — — $197
CalWorks caseload and cost of care — 55 — $10 65
Child and Adult Care Food Program caseload and COLA $0.04 0.2 — 24 25
Annualization of prospective pay costs — 14 — — 14
One-time adjustments a — -21 — -42 -63
Expiration of one-time stabilization payment — -163 — — -163
Subtotal (—) ($81) (—) (-$8) ($74)
Totals -$0.04 $175 -$14 -$10 $150
aThe Governor’s budget also includes a $75 million reduction in federal funding beginning in 2025‑26.
bIncludes prior year one-time costs associated with quality carryover, child care infrastructure carryover, court cases, and the whole child community equity program as well as the COLAs for Resource and Referral and Local Planning Councils.
COLA = cost-of-living adjustment.