High-quality early childhood care and education (ECE) has both short- and long-term benefits that can help reduce racial disparities and close income gaps. Fortunately, federal funding for ECE represents a sizeable share of all public ECE funding (PDF) in the United States. But not all states are accessing and strategically deploying these dollars.

To address this need, a team of Urban Institute researchers, with support from the Foundation for Child Development, led a year-long project to learn from national leaders and policy, program, and fiscal specialists from five states that have made significant strides in accessing and using these funds: Georgia, Illinois, New Mexico, Texas, Washington. National leaders nominated these states. The states vary geographically, in their administration of ECE services, and in their political contexts, making them good case studies from which to learn best practices.

Here are considerations and promising strategies states can use to access and employ available federal funds for ECE systems and workforce compensation.

1. Generate the political will to access all available ECE funds. Without support from state legislators, governors, and child care administrators alike, states may miss the chance to access funds for ECE systems and compensation. For example, New Mexico engaged state and community leaders, early care and education providers and families and associations to work together toward a common vision and generate political will.
2. Identify all possible sources of federal funds. Understanding what funds exist (PDF) is the first step to accessing them. Options include the following:
    
   • Typical funds like the Child Care and Development Fund that several states (PDF) are using to improve compensation.
   • Education funds, such as Elementary and Secondary Education Act, Title I, and Title II. They provide financial assistance to districts and schools with high numbers or high percentages of children from families with low incomes to help ensure all children meet challenging state academic standards. Some districts and schools are using Title I funds to support services for children from birth through the age of school entry, including salaries and benefits for ECE teachers and staff (PDF). Similarly, Title II is designed to improve the quality and effectiveness of teachers, and funds can be used to support ECE teachers’ professional development to provide high-quality literacy instruction.
   • One-time funds from sources such as the Preschool Development Birth through Five grants.
   • Atypical funding from sources such as the Workforce Innovation and Opportunity Act. These funds can be used for a range of supports, but several states are using them to support ECE apprenticeships and career pathways.
3. Collaborate across agencies and branches of government to create a shared vision and strategic plan for how to use the federal funds. Because multiple government entities oversee the different federal funds that can be used for ECE, collaboration creates efficiencies to help states fully access available funds. Georgia, Illinois (PDF), New Mexico (PDF), Texas (PDF), and Washington are using such plans to guide the equitable distribution of federal funds.
4. Create intergovernmental structures, tailored to state needs, to support ongoing coordination among the many players. Georgia and New Mexico created new state agencies focused on administering ECE services. Illinois (PDF) supports multiple interagency councils that coordinate ECE initiatives. In Texas, an Interagency Implementation Support Team (PDF) builds partnerships with federal, state, and local agencies to ensure children and families are connected to the resources and supports they need. In Washington, a large state agency oversees ECE and other child and family services, and agency leaders work with representatives from the legislature and governor’s offices to coordinate fiscal and policy priorities.

5. Ensure policy and fiscal leaders understand one another’s roles and responsibilities so they can work together to strategically allocate funds. Each federal program has unique policy and fiscal requirements. State leaders can reach out to peers in other states to learn about effective tools and processes for aligning policy and fiscal priorities to meet the federal requirements while using funds to improve ECE systems and compensation.

During the pandemic, federal outlays for child care, education, health and nutrition increased considerably. As federal pandemic funding ends, it will be more important than ever for state leaders to learn from innovative states to maximize other federal funds to stabilize ECE and continue improving ECE compensation.