Governor proposes universal preschool endowment seeded by surplus; OEC may draw up to 10% annually
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Summary
The budget outlines a new universal preschool endowment seeded by surplus funds; the Office of Early Childhood and State Department of Education would jointly implement a multiyear expansion with a proposed allowance to spend up to 10% of the endowment balance each year.
Jeff, secretary of the Office of Policy and Management, described a proposed universal preschool endowment that the administration says will seed a future universal prekindergarten system. The endowment would be seeded with surplus funds from the current fiscal year unless those funds are needed to reach an 18% budget reserve. The treasurer would manage and invest the endowment; the Office of Early Childhood, in consultation with the State Department of Education, could expend up to 10% of the endowment's balance in any fiscal year under the proposal.
When asked whether that 10% draw would begin in fiscal 2026, the secretary said, "Starts in fiscal 26" and later confirmed the presentation projection that "If we deposit 300,000,000 as we proposed, then, yes. In fiscal 26, there should be 30,000,000 available." The administration indicated the endowment is intended to grow and that its income would eventually support a state share of a universal preschool system, while the Office of Early Childhood plans to expand slots and reduce family costs over time.
Why it matters: Lawmakers from eastern and rural districts pressed for detail on how funds would be distributed and whether the program would reach child-care deserts. Representative Auccio (and others) repeatedly asked how the initial distribution would affect towns with limited child-care capacity; the secretary said Commissioner Bai of the Office of Early Childhood would present implementation detail in subsequent hearings.
Program features and timing: The administration described the universal preschool as a multiyear effort, with capital and operating implications. The endowment would be invested by the treasurer; OEC and SDE would coordinate slot expansion and competitive grants. The secretary cautioned that surplus deposits vary year to year and that the second-year projection of about $400 million depends on revenue outcomes at the close of the current fiscal year.