As public transitional kindergarten booms, child care centers are closing

Spaces for 3- and 4-year-olds shrink in public and private preschool centers as transitional kindergarten increases

Fuller’s team also found that families in the highest-income neighborhoods were most likely to apply for new pre-K seats in public schools. In Los Angeles County’s wealthiest fifth of ZIP codes, such as Brentwood, demand for public kindergarten jumped 148% as families chose free programs instead of paying up to $36,000 a year for private kindergarten.

Meanwhile, enrollment in the poorest fifth of postcodes has increased by just 50%, leaving many families in subsidized childcare or with relatives, especially since some state schools only offer half-day options.

The full impact on the childcare industry remains uncertain. California is allowing subsidized child care centers to keep their pre-pandemic budgets even if they lose 4-year-olds. This “hold harmless” subsidy is expected to end in July 2026, with more plant closures expected to follow.

As 4-year-olds flood public schools, policymakers hope the new public school seats will free up scarce child care spots for younger children. But there are many regulatory and financial barriers that hinder the transfer to younger children.

“It’s not just about flipping a switch and saying this classroom will now serve a two-year-old,” said Nina Buthee, executive director of EveryChild California, which advocates for publicly funded child care and early education. Busey explained that operators will need to reconfigure classrooms, install new sprinkler systems and hire more teachers.

“It’s a nightmare,” she said. “You need permission from the fire marshal and you also need permission from the Department of Social Services Community Care Licensing Unit. That itself takes six to 12 months, and that’s assuming you have the money to be able to close the classrooms and pay for renovations and then have them ready for new children when you reopen.” She said many operators thought closing was easier.

What’s more, Buthee said the economics of child care centers rely on 3- and 4-year-olds because they are less expensive to care for. State regulations require one teacher for every three to four infants or toddlers. For 4-year-olds, there is one teacher for every 12 children.

According to Buthee, most child care centers run a slight loss on their infant programs and offset that with income from preschoolers. “When you lose those preschoolers, there’s no funding to replace it,” Bussey said. “The whole business model completely collapsed.”

Los Angeles officials are aware of these problems. “Expanding transitional kindergarten in California has many benefits, but it also comes with unintended consequences,” a spokesperson for the Los Angeles County Department of Public Health’s Office of Early Care and Education Advancement said in an email. The office is working to help child care and early education operators navigate the challenging market and is publishing a new financial and business resource guide in October 2025.

An obvious lesson, both Fuller and Bussey agree, is to make community child care centers part of an expansion of publicly funded preschool programs, not just public schools. This way, the centers can retain older children and continue operating, rather than losing children and income. When Oklahoma expanded its preschool program in 1998, existing centers in the state also closed extensively. Oklahoma then decided to open the funding to community providers. Both Fuller and Bussey praised the city for including community centers in its preschool expansion from the beginning. Still, there are problems there. As public subsidies for 4-year-olds increased, the number of places for infants and toddlers decreased.

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

The education system is complex, and when you tinker with a small part, it can have ripple effects. There are no quick fixes for Fuller. Policymakers must balance the sometimes conflicting goals of improving education for low-income children and alleviating the high cost of child care. There is no one-size-fits-all answer.

Contact a Staff Writer Jill Bacher Call 212-678-3595, jillbarshay.35 on Signal, or barshay@hechingerreport.org.