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Obama proposes $1 per pack cigarette tax to fund preschools

Senate Budget committee staffers unpack boxes of President Obama's 2014 budget proposal on Wednesday.

Saul Loeb/AFP/Getty Images

Senate Budget committee staffers unpack boxes of President Obama's 2014 budget proposal on Wednesday.

As expected, President Barack Obama proposed a tax hike Wednesday to pay for his  “Preschool for All” plan. The size of the proposed tax is nearly twice earlier estimates: 94 cent per pack of cigarettes.

This large tobacco tax hike, which would affect all tobacco products, would go into effect as early as Jan 1. The U.S. Office of Management and Budget projects this would bring in $78.1 billion over 10 years, which would more than cover universal pre-kindergarten's estimated $75 billion price tag.

The president first mentioned his plans for universal early education in his State of the Union address in February. Shortly afterward, he traveled to a Georgia school where he made the case for how universal preschool benefits the nation as a whole. Today’s budget proposal represents the third major step as the White House outlined its plan to fund this “Preschool for All.”

In addition, the federal Department of Education released a few more details on what the program might look like. The federal government would partner with states to start or expand free, full-day preschool programs for children in families that are at or below 200 percent of the poverty line.

Kris Perry, Executive Director of the First Five Fund, says today’s budget shows that the Obama Administration is attempting to be a “catalyst” to get states to “embrace universal PreK policies.”

To assure quality, some federal funds would be targeted towards teacher training and performance evaluation. All funds will be allocated to states, which would distribute them to local school districts and other preschool service providers. In the initial years, the federal government would cover more of the costs and gradually scale back over a ten year period.

The Department of Education also announced that it would award $750 million to states to strengthen their early learning initiatives.

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