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On May 7 the released the proposal for fiscal year 2010. As Early Ed Watch at the time, that budget includes funding for several new early education programs, including Title I Early Childhood Grants, Early Learning Challenge Fund, Early Literacy Grants, and Home Visitation. Over the next few weeks, we’ll be taking a closer look at these proposed programs. Today, we turn to .

The President’s fiscal year 2010 budget requests $500 million in funding for a new program of matching grants to school districts that use their Title I funds to make investments in pre-kindergarten programs. Title I, the largest federal program supporting preK-12 education, is intended to improve education for disadvantaged youngsters. Current law allows school districts that receive Title I funds to use those to provide pre-k and other early childhood education services to at-risk children below the age of compulsory school attendance. But only about 2 percent of Title I funds are used for this purpose.

The proposed Title I Early Childhood Grants program seeks to create an incentive for school districts, which received a in Title I funding as a result of the (ARRA, or the stimulus), to use those funds to create, expand, or improve the quality of pre-kindergarten programs.

Funds would be distributed to states based on their share of Title I, Part A funds received in fiscal year 2009. States would then use these funds to provide matching grants to school districts that invest Title I funds in pre-k and other early childhood programs. States would have considerable flexibility in how they choose to operate these matching grant programs. For example, states would be allowed to determine the size of the required local match, to set additional quality requirements for districts to receive matching grant funds, to choose to prioritize certain types of early childhood investments over others, or to prioritize certain school districts over others for matching grants. This flexibility is designed to allow states to tailor the matching grant program to meet identified state needs and to coordinate effectively with existing state pre-k and other early childhood investments. School districts would be required to provide annual reports on the amount of pre-k expenditures and the number of children served.

It’s not surprising to see the administration seeking ways to encourage school districts to use stimulus Title I funds for pre-k. The of the stimulus bill included provisions to set aside 15 percent of both Title I and IDEA funds in the bill specifically for services to preschool-aged children. Those provisions were eliminated in conference committee negotiations, however, due in large part to opposition from interest groups representing school boards and administrators. The proposed Title I Early Childhood Grants program is the administration’s second attempt to push more Title I funds into pre-k programs.

Incentivizing districts to use the infusion of new Title I funds to make pre-k investments makes a lot of sense. Over the past decade, increasing state investments have fueled pre-k expansion. Current budget crises now threaten this progress. The stimulus, however, has provided many districts with a substantial infusion of Title I resources they can use to keep the ball moving forward on pre-k even as states falter. Given the abundant evidence that achievement gaps for disadvantaged students are entrenched well before they start kindergarten, pre-k investments are also consistent with districts’ mandate under NCLB to narrow achievement gaps. And districts that use Title I funds for pre-k are uniquely well-situated to ensure that pre-k programs are aligned with K-3 offerings. The challenge, of course, is to persuade districts to use new Title I funds for pre-k, rather than simply maintaining status quo programs. And that’s exactly what the administration hopes these new incentive funds will be able to accomplish.

There’s a catch here, however, that could undermine the effectiveness of what’s otherwise a smart strategy on the part of the administration. The administration’s proposal here hinges on persuading districts to invest new, stimulus Title I funds in pre-k. But, in its to districts and public outreach around stimulus funds, the Department of Education has also made a point of about the “cliff” in federal funds—the fact that stimulus investments in Title I, IDEA, and the Education Stabilization Fund will disappear after two years—and in urging them to use these funds to make one-time investments, rather than spending them on new programs and positions that require ongoing funding commitments. The problem: Pre-k is much more an example of the latter type of investment—one that requires ongoing funding—rather than the former. As a result, districts may be reluctant to use stimulus funds to invest in new pre-k programs they aren’t sure they can sustain—even if the federal government provides them an incentive to do so.

The administration has an answer to this, buried in the text of the fiscal year 2010 justification of appropriations estimates to Congress. The Obama administration is seeking to create a new Early Learning Challenge Fund, as part of the broader Zero to Five Initiative President Obama during his campaign. Administration officials intend for that Early Learning Challenge Fund to include—among other things—funding to sustain local early childhood initiatives started with ARRA funds.

Essentially, the Department is asking districts to make future funding commitments now based on the promise of a program that doesn’t yet exist. Before the Early Learning Challenge Fund can provide funding to sustain local early education initiatives, it first has to be authorized by Congress—and, while the outlook for major early education legislation is better than at any time in recent memory, it could still be tricky, particularly with health care reform sucking up so much oxygen right now. Districts have, of course, been known to make funding commitments without a clear sense of how they’ll sustain them in the future. But whether or not Congress chooses to authorize this program could have a major impact on whether or not districts choose to use their new ARRA Title I funds for early childhood programs. It’s increasingly clear that the Early Learning Challenge Fund is the critical lever when it comes to driving early education forward—and later this week we’ll be taking a closer look at the administration’s proposals for that program.