Using administrative and qualitative data, we investigate how decentralization affects the supply of optional educational services using the example of school-based prekindergarten (pre-K) in New Orleans during the transition to a majority-charter system. Although charter school leaders are motivated by student- and school-level benefits of pre-K, they face unique obstacles to funding classrooms. We find that the number of pre-K seats fell substantially as decision making and budgeting were decentralized. Charter schools that did offer pre-K experienced few internal benefits, on average, in terms of future enrollment or test performance, as pre-K graduates are highly mobile. This study provides initial evidence that decentralization without offsetting financial incentives can lead to reduced investments in programs that advance the social goals of education.