States spent about $5.1 billion on pre-K programs in 2011-12, according to researchers.
The researchers also found the state is spending less per child than it did since researchers started tracking it during the 2001-02 academic year.
Per-student funding for existing programs during 2011-12 dropped to an average of $3,841 for each student. Average spending per student has never dropped below $4,000 in today's dollars.
Among the 40 states that offer state-funded pre-K programs, 27 cut per-student spending last year. This translates to $548 million in cuts.
"The state of preschool in America is in a state of emergency," said report author Steven Barnett, director of the National Institute for Early Education Research at Rutgers University.
The study also found that more than half a million of preschool students are in programs that don't meet standards suggested by industry experts. Those programs could otherwise qualify for federal dollars.
Nationally, 42 percent of students or more than a half million students were in programs that met fewer than half of the benchmarks researchers identified as important to gauging a program's effectiveness, such as classrooms with fewer than 20 students and teachers with bachelor's degrees.
The Associated Press contributed to this report.