BATON ROUGE, La. — A state fund that provides matching dollars to local communities for early childhood education could run out of money within the next few years, according to a new analysis by Leaders for a Better Louisiana.
The study found that without new revenue sources, the Early Childhood Education Fund (ECE Fund) will be unable to make full matches by fiscal year 2027-28 if participation continues to grow at its current pace. The fund was created by the Louisiana Legislature in 2017 to match local investments in early childhood education on a dollar-for-dollar basis.
“This has been a great policy initiative that has succeeded in bringing local dollars together with state funding to support early childhood education,” said Barry Erwin, chief policy officer of Better Louisiana. “It’s important for us to understand exactly where this fund stands in terms of revenues, because we don’t have much time to find a funding solution before its reserves run out.”
The ECE Fund received a one-time $40 million appropriation in 2023, supplemented by dedicated revenue streams in subsequent years. As community participation expanded, however, the fund began drawing down its reserves. Recurring revenues are projected to plateau at about $21 million per year, while expenditure needs are expected to reach $30 million by the end of the decade—or nearly $50 million if participation grows by 10 percent annually.
The report estimates that about 57,000 Louisiana children currently receive publicly funded childcare assistance, while an additional 116,000 lack access to affordable, quality care. Since its creation, the ECE Fund has helped serve more than 1,800 additional children by doubling the impact of local investments.
With 14 parishes now raising nearly $30 million in local funds—up from just four parishes and $3 million in 2022-23—Better Louisiana said the state must act to sustain the program’s success.
“The dollar-for-dollar match provided by the Early Childhood Education Fund provides a strong incentive for communities to invest in early childhood education and effectively makes the state funding go twice as far,” Erwin said. “With more communities committing local dollars, policy makers should consider new funding options to ensure the ECE Fund remains sustainable and positioned to grow.”
The full analysis is available at betterla.org/news/early-childhood-education-fund-to-run-out-of-money-soon/.