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Monthly Update



July 25, 2025

Federal Policy Update

As states continue to take the lead in education policy, we’re keeping a close eye on Washington, where several federal developments — some final, others still unfolding — could have ripple effects across state education systems. Let's take a moment to do a quick roundup of key federal actions we’ve previously covered and where they stand now.


Congress Approves Big Shifts in Education and Child Care Policy


The One Big Beautiful Bill Act (OBBBA), signed into law in July, enacts sweeping tax and fiscal changes with far-reaching implications for education and child care. While most provisions take effect in 2026, states, schools, and families are already preparing for how these changes will shape early learning, K–12 schooling, and workforce pathways. Below is a high-level overview, with resources to dig deeper into each issue. 


Early care and learning


The OBBBA makes two major changes that could reshape access to child care:


  • Employer-Provided Child Care Tax Credit (Section 45F): The Act significantly increases the maximum allowable credit and raises the percentage of eligible expenses employers can claim. Businesses can now receive credit for contracting with licensed providers — including reserving child care slots — making participation feasible for mid-sized employers without on-site facilities. This could expand private-sector investment in licensed child care, particularly in workforce-intensive industries.  


  • Expanded Child Tax Credit: Families will receive larger after-tax benefits, which analysts expect many will use to offset preschool and licensed child care costs. While not targeted specifically to early learning, the change could help reduce cost barriers for families in high-cost areas. Check out our recent blog on the subject for more!


These provisions mark a federal shift toward tax-based incentives and public-private partnerships, rather than direct child care grants, as the primary strategy for increasing access.


K–12 education


The most significant K–12 provision is the creation of a new federal scholarship tax credit, allowing families to claim a nonrefundable credit of up to $1,700 per child for eligible education expenses, including tuition at private or religious schools, tutoring, and other supplemental services. This could encourage greater participation in private education markets and drive growth in tutoring and academic enrichment programs.  


The Act also introduces other K–12-related tax shifts: 


  • 529 Plan Flexibility: While primarily aimed at postsecondary pathways, the expanded uses for 529 savings plans — including approved credentialing programs — continue a broader trend of giving families greater control over education spending through tax policy. Here's a good resource highlighting these changes.


  • Homeschool Savings Provisions: Families can now use 529 funds for certain homeschool expenses, a move likely to further boost demand for homeschool resources in states with active home education networks.


Taken together, these changes signal a growing federal reliance on tax-driven school choice rather than direct formula funding as a lever for shaping K–12 options. 


Postsecondary education & workforce development 


The OBBBA expands Workforce Pell Grants to cover short-term training programs meeting earnings and quality benchmarks, beginning in 2026. This opens Pell eligibility to high-demand, skills-focused programs in fields such as healthcare, IT, and advanced manufacturing. Read the U.S. Department of Education's implementation announcement of these changes.


In addition, updated rules for 529 plans allow savings to be used for approved workforce credentialing programs, encouraging families to plan earlier for alternative pathways outside traditional degrees. Together, these provisions reinforce a federal push to align education policy more closely with workforce needs.


Aligned’s take: The OBBBA represents one of the most significant federal tax changes to education and child care policy in decades. Its reliance on tax incentives to influence both business and family decisions marks a shift in approach, and the full impact on access, participation, and long-term outcomes will take years to understand.

Missouri News

Pre-K Case Studies - Why these stories matter


At Aligned, we’ve spent the past decade working alongside policymakers to build a better early childhood system in Missouri — one that’s rooted in quality, equity, and access. These case studies highlight what happens when that work meets the real world: classrooms that give young learners a strong start, districts that rise to the challenge of expanding access, and communities that benefit from smart public investment. 


We advocated for placing Pre-K students into the foundation formula: first through a carefully constructed policy trigger tied to full funding, then by making that trigger attainable.


When we saw that hold-harmless districts couldn’t benefit from that funding stream, we championed the Missouri Quality Pre-K (MOQPK) grant to fill the gap. When Missouri’s ban on measuring early childhood quality blocked our eligibility for federal support, we worked to overturn it and helped launch the Quality Assurance Report (QAR) system. And when it was time to expand access again, we led efforts to double the allowable ADA percentage from 4% to 8%


These aren’t just wins in a policy ledger. They’re why more children enter kindergarten ready to learn. Why more parents have access to high-quality care. Why Missouri secured new federal investments in early learning. And why our state’s early childhood landscape looks so different today than it did ten years ago. 


These stories show what’s possible—and what’s at risk if we don’t protect that progress. 



School funding task force examines local effort, funding disparities 


The School Funding Modernization Task Force met just after our June monthly newsletter, continuing their efforts to review the states' funding formula and explore options to improve fairness and predictability.


Task force members reviewed the formula’s core components, including the State Adequacy Target (or the base funding level per student) and its adjustment process when state appropriations fall short. Some members were worried about the annual adjustment process and warned that it undermines stability for school districts. 


Most of the meeting focused on Missouri’s reliance on local property taxes to fund public schools. Missouri relies more heavily on local tax revenue for school funding than most states, federal data shows.  


Department of Elementary and Secondary Education (DESE) Deputy Commissioner Kari Monsees presented data to the task force, highlighting wide disparities in local wealth and tax bases.  


For instance, the assessed value per student — a community’s property wealth divided by a district’s average daily attendance — ranged from $39,000 in property-poor districts to $667,000 in property-wealthy ones. Differences in property wealth can lead to significantly higher spending in wealthier districts. 


The task force gave considerable attention to three recent studies of Missouri’s funding system, including one produced by us at Aligned in collaboration with Bellwether Education Partners.


All three identified common concerns: 

  • Revising the frozen local effort calculation, which is still based on 2005 property values. 
  • Establishing a clear base cost per student, rather than relying on the current State Adequacy Target adjustment process. 
  • Updating funding thresholds for specific student populations, including at-risk students, English language learners, and students receiving special education services. 


Task force members request that DESE bring these researchers in for further discussion and to share best practices from other states with similar challenges.  


Last, four working groups were formed to study specific policy areas: 


  • Funding Targets – how to set and adjust a statewide funding target over time. 
  • Student Counts – whether to use enrollment or attendance and how to weight special populations, such as low-income students and English learners. 
  • Performance Incentives – which outcomes to incentivize and how heavily to weight them. 
  • Local Effort Factors – updating how local property taxes and other local resources are measured in the formula. 


These working groups will meet through August, with additional full task force meetings expected to keep members apprised on progress. More to come from us at Aligned as conversations and discussions continue. 


Key Upcoming Dates


  • September 10, 2025 – Veto Session
  • December 1, 2025 – First day to pre-file bills for 2026
  • January 7, 2026 – Start of the 2026 Legislative Session


In other news


Brent Lewis, Executive Director of oneCOMMUNITY in Kansas.

Kansas News

Shared costs, shared solutions: oneCOMMUNITY's child care model


Child care access remains one of Kansas’ biggest workforce challenges. Costs are high, wages for providers are low, and many communities lack enough licensed slots to meet demand. Brent Lewis, Executive Director of oneCOMMUNITY, believes his organization has a solution—and it doesn’t rely on government funding.


“We’re creating the pillar of support that’s been missing,” Lewis said. “Child care isn’t just about families — it’s workforce infrastructure. Even the smallest employer can use this model to stabilize their workforce.”


A market failure and a new approach 


Lewis founded oneCOMMUNITY after his own struggles to find affordable care. His conclusion: the traditional fee-for-service model simply doesn’t work. 


You cannot collect enough revenue as a provider to cover the expense of quality care,” he explained. “Child care is a person-intensive industry. We can’t automate it the way other industries can, and that creates a market failure.” 


oneCOMMUNITY’s answer is a shared-cost model — like health insurance — where employers and employees share the cost of care. Employers subscribe to licensed child care slots for their employees, dramatically reducing the cost for families.  


The nonprofit first places children in its expanding network of providers, providing them with stable revenue. In areas with severe shortages, oneCOMMUNITY will eventually open its own centers to expand capacity. 


Workforce infrastructure, not just child care


For Lewis, solving the affordability issue is only half the battle. Kansas currently meets only 45% of the demand for child care statewide (42% in Sedgwick County), and providers struggle to retain staff due to low wages and limited benefits.


“Without improving wages and benefits, we won’t see the growth we need,” Lewis said. “This model makes it possible to pay better and offer things like health insurance and retirement benefits, making child care a career rather than just a stopgap job.” 


The benefits extend directly to Kansas employers. By offering child care as a workplace benefit, companies can retain talent and help parents stay in the workforce. Lewis emphasizes that this is an option for businesses of all sizes. 


“A small dental office with just four employees can offer a meaningful child care benefit,” he said. “Most business owners don’t realize it’s possible—that’s the education challenge we’re working to solve.” 


Recent changes at both the federal level make this investment even more attractive. Businesses can now take advantage of expanded federal child care tax credits, and Kansas employers may also qualify for state-level credits — turning part of their child care spending into tax savings.


Scaling across Kansas 

OneCOMMUNITY is starting in metropolitan areas, where more employers can serve as shared-cost partners. But Lewis envisions statewide adoption. 


We can make this work in any of Kansas’ 105 counties if there’s a shared-cost partner,” he said. “In rural areas, that might mean partnering with local foundations or other community groups instead of large employers.” 


The nonprofit is still in its early stages but expects to be self-sustaining within two to three years — a key part of what Lewis calls a “red-state model.” 


“This doesn’t require direct government funding,” he said. “No one stakeholder can solve this alone — not families, not employers, not the government. But together, we can build the infrastructure Kansas families and our workforce need.” 


Community leaders and business owners can learn more at onecommunityks.org or contact Lewis directly at brent.lewis@onecommunityks.org


Task force weighs at-risk funding, formula changes


The Kansas Education Funding Task Force met July 1-2 to examine potential changes to the state's school finance formula, focusing on how to better support students from economically disadvantaged backgrounds.


On July 1, members reviewed the history of at-risk weighting and discussed audit findings showing inconsistent use of at-risk funds across districts.


The Kansas Legislative Research Department (KLRD) presented modeling on how adjusting base at-risk weights could shift funding, particularly for smaller or rural districts. Several members emphasized that any changes should be paired with stronger accountability for how at-risk dollars are spent.


The July 2 session centered on high-density at-risk weighting, a policy tool designed to provide additional funds to districts with very high concentrations of low-income students.


KLRD shared simulations showing that even modest weight increases (0.05 or 0.10) would direct significant additional resources to these schools.


Members highlighted the higher costs faced by high-poverty districts — such as staffing, student mobility, and community support needs — while others raised concerns about statewide budget impacts and trade-offs for districts with lower at-risk populations.


This discussion reflects growing national attention to concentrated poverty as a distinct funding challenge. As Bellwether Education Partners note, schools serving high concentrations of low-income students often need schoolwide and community-facing supports, not just student-level interventions — a need that requires targeted funding approaches like a concentrated poverty weight.


The task force discussed a variety of other policy options:

  • Increasing base amount of funding per student to reflect higher costs for low-income students.
  • Revising eligibility thresholds to better direct funds to at-risk students.
  • Incorporating accountability findings from a pilot program into future funding decisions.


The task force will continue refining these options, with recommendations expected ahead of the 2026 legislative session. Next up: the task force is scheduled to reconvene on Wednesday, August 13, 2025.


In other news


Aligned Director of Policy & Research, Eric Syverson (left) presenting with Aligned Manager of Policy & Outreach, Claudia Fury-Aguirre (right) at the Wichita Cradle to Career Roundtable event.

Kansas Cradle to Career First Stop: Wichita!

Last week, Aligned launched its 2025 Cradle to Career Listening Tour in Wichita — and the turnout did not disappoint. A packed room of civic, school, business, and nonprofit leaders came together to kick off this important statewide effort focused on strengthening the education-to-workforce pipeline. 


Wichita served as the ideal first stop, with leaders from across sectors engaging in a lively, solution-focused discussion. The two-hour session was highly interactive, inviting participants to identify both pressing challenges and innovative solutions spanning early learning, K-12 education, higher education, and workforce development.


Attendees rolled up their sleeves and got to work — producing a robust list of potential strategies aimed at improving outcomes for Kansas students and communities. These ideas were captured and will be shared in a statewide summary at the conclusion of the tour. 



Aligned’s Cradle to Career Listening Tour will continue in cities across the state throughout the year, ensuring that every region has a voice in shaping policies that reflect local needs and opportunities. We’re grateful to Wichita for setting the tone and showing what’s possible when communities come together to build a stronger future. 

Join Us on the Cradle to Career Listening Tour

This summer and fall, Aligned is hitting the road for our Cradle to Career Listening Tour 2025 — a four-city series of community conversations focused on the full education and workforce pipeline.


From early learning to college and career readiness, these events will bring together local leaders, educators, and employers to explore what’s working, what’s not, and where policy can better support opportunity across Kansas.


Upcoming Stops:


  • Garden City – August 6, 2:00–4:00 PM, Garden City Community College
  • Kansas City – August 20, 2:00–4:00 PM, The Family Conservancy
  • Topeka – September 17, 1:00–2:30 PM, Kansas Chamber


We’d love to see you there — sign up and RSVP here.

Have a great weekend,







Torree Pederson

President

torree@wearealigned.org


Eric Syverson

Director of Policy & Research

erics@wearealigned.org

About Aligned


Aligned is the only state-wide non-profit, nonpartisan business group working in Kansas and Missouri on educational issues impacting the full development of our children, from supporting high-quality early learning to solid secondary programs that provide rigorous academic programs and real-world learning opportunities.


Our vision is that our public education systems in Kansas and Missouri have the resources and flexibility to prepare students to pursue the future of their choice.


We are currently focused on education policies that will strengthen early childhood education, teacher recruitment and retention, and school finance reform.


Learn more about our work.