A New Endowment Aims to Transform Connecticut’s Early Education System

On July 1, Connecticut State Treasurer Erick Russell announced a $300 million transfer from the state’s general fund surplus into a newly created Early Childhood Education Endowment. While the press release may have sounded routine, it marked the culmination of years of work by early education advocates fighting for sustainable, long-term funding. “This has been a decades-long fight for advocates. There might not have been a very specific name to it, but the concepts have been decades in the making. This idea of funding early childhood for the long term has been the top request,” says Emily Byrne, executive director of Connecticut Voices for Children. Merrill Gay, executive director of the Connecticut Early Childhood Alliance, agrees on the significance of the endowment: “It's the biggest thing that's happened in my 20 years of advocacy in early childhood,” says Gay.

The endowment became a reality thanks to Senate Bill 1, but many of the ideas contained in that bill came from recommendations made by the Governor’s Blue Ribbon Panel on Child Care that was established via executive order by Governor Ned Lamont in March 2023. In its report issued in December 2023, the panel concluded that the state’s early childhood system was in urgent need of repair due to “decades of neglect” caused by insufficient funding of a system that had become “rigid and inflexible.” The panel’s report specifically prioritizes birth to three-year-olds, estimating that the state needs approximately 17,000 more infant and toddler child care spots to meet the need.

While the governor’s original plan focused on an endowment to fund universal pre-K, negotiations between the governor, state lawmakers, and advocates resulted in the creation of the Early Childhood Education Endowment with a focus on infant and toddler care in addition to pre-K. The endowment should continue to grow each year through a combination of funding from budget surpluses as well as returns on investments, though the exact amount of future contributions depends on budget surpluses and reserves. For the next two fiscal years, up to 12 percent of the endowment can be spent, while that number drops to 10 percent in the fiscal year ending June 30, 2028.

The endowment will be used for a variety of purposes related to improving the state’s early education system, including paying higher provider rates and additional child care spots through Early Start CT, the newly launched, state-funded early care and education program that combines three existing programs. “It's all been merged into one now and the endowment will be used to first strengthen those programs by substantially increasing their per child payment amounts,” says Gay. The legislation specifies that at least 35 percent of new child care spots must be reserved for infants and toddlers by July 1, 2027 given the dire need for such spots throughout the state.

The governor’s panel named improving support for the state’s early childhood workforce as “the system’s most pressing need,” and the higher payment rates made possible by the endowment should result in better wages for the workforce. The law also requires that the state launch a health insurance subsidy pilot program in fiscal year 2027 for early educators ineligible for Medicaid and provides $10 million for the subsidy, a strategy similar to one that other communities have recently pursued to help educators attain health coverage.

With the help of the growing endowment, by 2028 the state hopes to provide free child care and pre-K for families enrolled in Early Start CT who earn less than $100,000 per year. Additionally, the goal is to set a maximum child care cost of seven percent of household income for families who earn more than $100,000 per year. “The endowment needs to grow through subsequent deposits of surplus funds and investment return until there is enough there to achieve the first task, which is raising payment rates to the existing providers. After that, we can start to grow the system,” says Gay.

The creation of the endowment was not the only important piece of early childhood legislation recently passed in the state. In a statement praising “the largest expansion of access to early childhood education in Connecticut history,” Governor Lamont pointed to the endowment and two other bills that promise to improve the state’s early education system. One of those bills creates the Early Care and Education Program Portal to provide families with real-time information about slot availability while the other authorizes up to $80 million in bonds to establish a grant program that will provide financial assistance for facility improvements for family child care homes, licensed child care centers, and group child care homes.

While the endowment’s creation is a major victory for advocates, its dependence on surplus budget funds at a time when a possible recession is looming means its overall dollar amount and, therefore, its impact, is uncertain. “Surplus dollars are dependent on economic activity and almost every economist right now is forecasting a potential recession,” says Byrne. The state struggled to regain the jobs lost during the Great Recession, lagging behind much of the rest of the country in job growth. Despite these uncertainties and the need for continued vigilance, the state’s advocates are proud of how much progress the state has recently made towards their long-term goal of sustainable early childhood funding. “Connecticut is a pioneer in the sense that it’s a very comprehensive policy package for early childhood,” says Byrne.