In 2005, spending on state-funded prekindergarten was $2.8 billion in state and federal funds. Most of these programs target children most at-risk for school failure, including those living in families with low incomes.
This brief focuses on how states can use TANF funds to support early childhood programs.
It draws on CLASP's previous report, Financing Universal Pre-Kindergarten: Possibilities and Technical Issues for States in Using Funds Under the Child Care and Development Fund and Temporary Assistance for Needy Families Block Grant,3 and subsequent federal guidance.
Whether and the extent to which a state can actually increase its use of TANF for such purposes will depend on circumstances in the state.
Some TANF expenditures must be for needy (low-income) families, while others are not limited in this way; this requirement is based on which purpose of TANF justifies the expenditure.
Treating early education expenditures as non-assistance affects the extent to which unobligated carryover funds can be used, since such funds can only be spent on assistance.
As explained above, a state remains free to use its unobligated carryover funds for current-year assistance costs, thus freeing up current-year TANF funds for the non-assistance expenditures, but the state will need to be mindful of this constraint.
Different Rules for Maintenance of Effort Spending.
State expenditures on early education may count towards a state's MOE requirement.
However, federal law also provides that a state may not count toward MOE educational activities or services that are generally available to other residents of the State without cost and without regard to income.11 In policy guidance issued in 2005, HHS explained the following.
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