financial pressure

Closure of Clayton Early Learning center in far northeast Denver exposes pain points in early childhood care

Preschoolers play at Clayton Early Learning in 2015.

When the news broke last week that Clayton Early Learning planned to shutter its child care center in Denver’s Green Valley Ranch neighborhood, dozens of parents voiced anger and surprise as they scrambled to line up new child care arrangements.

Behind the scenes, local and national early childhood advocates also took note.

Suddenly, one of the most well-respected names in early childhood education was downsizing. After just four years, Clayton was leaving an underserved city neighborhood, ending service for middle class tuition-paying families and retreating from its aspiration to provide quality child care to a mixed-income population.

“That is not a decision that we wanted to have to come to,” said Clayton’s President and CEO Charlotte Brantley. “We don’t believe it’s the right way to go to segregate kids based on their race, income or anything else.”

The move, however, illustrates just how financially tenuous the child care business can be — even for the biggest players in the game.

“It is concerning for Clayton, being a really well-known, high-functioning provider, to not be able to make it work,” said Emily Bustos, executive director of Denver’s Early Childhood Council.

Clayton, whose flagship school in northeast Denver is part of the national Educare network of child care centers serving at-risk children, doesn’t look like a place with money worries. Stately buildings dot its 20-acre campus, which long ago housed a boys orphanage and school. The organization also owns the 155-acre Park Hill Golf Club, which brings in about $650,000 a year after expenses.

Still, Clayton leaders and industry experts say top-notch child care is extremely expensive — costing tens of thousands of dollars a year per child. And help from government coffers is lagging.

“It’s an example of how underfunded high-quality programs in early childhood are,” said Cheryl Caldwell, director of early childhood education for Denver Public Schools.

Said Brantley: “The industry runs on an absolute shoestring budget.”

While Clayton is closing its far northeast Denver location, many of the approximately 100 children served there will be allowed to transfer to Clayton’s flagship campus on Martin Luther King Boulevard because they qualify for federally funded Head Start or Early Head Start. By combining Head Start funds with Denver Preschool Program funds and state money available to low-income families, the school can cover the cost of those slots more easily.

Up to 43 children, half of them infants or toddlers, will lose their spots at Clayton after Aug.18. They include 25 tuition-paying children at the main campus, three tuition-paying children at the far northeast site and possibly up to 15 low-income children at both sites who currently get state child care subsidies. Some of 15 children may be eligible for Head Start, which would allow them to stay at Clayton.

The closure will hit families with infants and toddlers particularly hard because there’s a chronic shortage of quality care for children that age in Denver.

While displaced preschoolers will probably be able to find other arrangements, “The infants and toddlers … they have basically nowhere to go,” Brantley said.

Some tuition-paying parents expressed their frustration at Clayton officials for not having being more proactive in addressing the financial challenges.

“You are the caretaker for the families because we don’t work with the budget,” Nate Paul, who has a 17-month-old in care at the main campus, and is expecting a baby who is already on the Clayton waitlist, told school officials at a recent meeting. “We don’t know what the cost per head is. We don’t have our hand on the gears and levers. You do. Your job is to make Clayton sustainable.”

Ryan Walsh, a father of two children served at Clayton’s main campus, said, “We’re not just a bunch of noise-making, smear campaign kind of people. We actually advocate for early childhood education, and this situation doesn’t benefit the community as a whole when we’re talking about early childhood and education funding advocacy in general.”

Brantley said about 30 staff members at the far northeast location will be able to transfer to jobs at the main campus, though some may take on somewhat different roles.

After operating its flagship campus for decades, Clayton Early Learning opened its second location in a building called Z Place in the Green Valley Ranch neighborhood in early 2013.

The additional space allowed both sites to begin accepting tuition-paying families. They had access to the same raft of benefits that Clayton’s Head Start families and those eligible for state child care subsidies did— small class sizes, extensive special services and lots of parent support.

But tuition — currently about $1,000 a month for full-day preschool and about $1,200 a month for full-day infant/toddler care — never covered the true cost of all that was provided, Brantley said.

Clayton covers $200,000 to $300,000 each year to close the gap between what tuition covers and what the program actually costs, Brantley said.

School officials launched the new location knowing that, but they hoped that more public funding would be coming to the early childhood field. At the time, a campaign was underway for a statewide ballot initiative that would raise millions for education, including preschool and full-day kindergarten. Voters soundly rejected the measure in November 2013.

There were other setbacks. In 2014, Colorado lost its bid for a federal grant that would have paid for new state preschool slots. Clayton would have been a partner in the effort.

Brantley said the state legislature’s perennial reluctance to increase education funding, combined with uncertainties about what will happen to federal early childhood funding under the Trump administration’s budget, also factored into the discussion to close the far northeast location.

In the midst of the deliberations, Clayton leaders learned that two separate grants that help fund other parts of the organization’s work — weekly “play and learn” groups for kids and caregivers, and coaching for other child care providers — would not be renewed.

“It’s this multitude of things that crashed together all at once,” said Brantley. “This was an incredibly difficult and disappointing decision to have to come to.”

Although Clayton owns the Park Hill Golf Club land and is in the midst of deciding whether and how to redevelop it, Brantley said it wouldn’t solve the problem of the far northeast site. For one thing, it will remain a golf course at least through the end of 2018, meaning no additional revenue is expected any time soon. In addition, any revenue from it would also need to support other aspects of Clayton’s large operation, which includes research, training and coaching.

Brantley said the fate of the seven classrooms at Z Place became clear in the spring as school leaders were developing the budget for the fiscal year that began July 1. The board voted to close the far northeast site in June.

Some of Clayton’s tuition-paying parents argued that they would have been willing to pay more if only school leaders had asked. But Clayton officials say the gap was too large.

Mike Burke, vice president of the Buffett Early Childhood Fund, a national Educare partner, said that he understands the parents’ instinct, but that it probably wasn’t a realistic request.

“An organization of Clayton’s caliber would have made it work if they could,” he said.

Educare programs have very robust staffing models “where you’re paying for degreed professionals, you’re paying for one, two, three teachers in the classrooms, family support workers, nurses, mental health consultants, speech and language consultants,” Burke said.

“When you start piecing it all together, you can see these cost-per-child averages raising, raising, raising.”

Burke said only a few of the country’s 21 Educare schools, including those in Miami, Maine and suburban Chicago, have classrooms that include children from tuition-paying families. But in most cases, it’s small-scale integration — only about 10 children.

Research on mixed-income preschool classrooms shows that such diversity has a positive influence on language development and social and emotional skills of low-income children. But Burke said early childhood financing structures aren’t set up to encourage socioeconomic integration because they come with strict eligibility requirements, often based on family income.

Locally, Mile High Early Learning, which like Clayton focuses on serving low-income families through Head Start and Early Head Start, draws around 7 percent of its 500 children from tuition-paying families.

But Pamela Harris, the organization’s executive director, knows how hard the balancing act is. Leaders there recently increased monthly tuition from $1,400 to $1,700 after a year of discussions.

That said, there’s still an invisible subsidy at work, Harris said — the discount that comes from paying child care workers a relatively low wage. Some in the field make so little they qualify for government assistance.

Overall, Harris believes there’s been progress on the early childhood front — gradual growth in Colorado’s state-funded preschool program, a new focus on early education in the federal Every Student Succeeds Act, and local efforts to connect the birth to five age span to the K-12 education system.

Against that backdrop though, Clayton’s plan to close its far northeast site “exposes the pain points that are still in early childhood,” she said.

year in review

Early childhood discipline, child care deserts and funding challenges in the spotlight during 2017

Malanna Newell is a toddler teacher at the Mile High Early Learning center in Denver's Westwood neighborhood. She started as a teaching assistant before taking Mile High's Child Development Associate training last fall.

Amid national debate on the disproportionate number of suspensions and expulsions given out to young boys and children of color, Colorado lawmakers and educators grappled with the best approach to discipline in 2017.

The year kicked off with a bill in the legislature to curb suspensions for early elementary and preschool students — a shift that would have put Colorado on the forefront of school discipline reform, some observers said. Although the bill had a broad array of backers, a Republican-controlled Senate committee killed the proposal after last-minute opposition from a group of rural school district leaders. Some of those leaders said suspensions weren’t a “rural problem,” but a Chalkbeat analysis found otherwise.  

Despite the defeat, advocates of the bill expect a renewed push for the measure during the 2018 legislative session.

In the meantime, Colorado’s two largest school districts — Denver and Jeffco — spearheaded changes to reduce the number of suspension handed out to young children. In June, Denver’s school board instituted a policy limiting the suspension of preschool through third grade students, though some educators worried they weren’t being given enough support to handle kids who misbehave.

In Jeffco, after Chalkbeat wrote about the district’s high rate of early elementary suspensions, administrators commissioned a report on the issue with recommendations to increase the use of restorative justice practices and other alternatives to suspension.  

Also in 2017, local early childhood leaders launched or expanded efforts to address key problems in the field — including teacher recruitment and retention and kids’ sometimes rocky transition to kindergarten.

At the same time, some early childhood advocates were forced to reckon with the perennial lack of funding that plagues the industry and constricts families’ choices. One of Denver’s most well-known child care providers, Clayton Early Learning, closed one of its two facilities last summer — a move observers said spotlights the high cost of quality child care.

But there were also bright spots in the funding landscape — some growing out of local efforts in Colorado’s rural towns and resort communities. A preschool in Holyoke found a way to give staff members generous raises and a growing number of cities and towns are getting new dollars for early childhood programs through sales or property taxes.

In Denver, several efforts — using a combination of public and private funds — aim to improve child care options in the city’s Elyria-Swansea neighborhood, which is designated a “child care desert.”

At the state level, officials promoted recently-created financial incentives for child care centers with top quality ratings, though some providers say earning those ratings is too much work.

Looking ahead to 2018, early childhood advocates hope to renew a tax credit that helps child care providers make ends meet. Plus, winners of a new early childhood innovation competition will get financial help to scale up their ideas.

Giving Quest

Advocates push to extend tax credit to encourage donations to cash-strapped child care providers

PHOTO: Porter-Leath

A wide-ranging coalition that includes early childhood, education and business groups is galvanizing support for a bill to extend a state tax credit that incentivizes donations to Colorado child care providers.

Advocates say the Child Care Contribution Tax Credit, which will be up for reauthorization during the 2018 legislative session, represents a key tool for supporting an expensive but perpetually underfunded sector.

“It’s the child care provider’s lifeline to additional funding,” said Gloria Higgins, president of the business group Executives Partnering to Invest in Children, or EPIC.

It’s a public-private partnership of sorts — with the state rewarding private citizens and businesses with lower tax bills when they support early childhood education.

During fiscal year 2016, Colorado taxpayers made about $52 million in donations that qualified for the tax credit, according to data from the Colorado Department of Revenue. Donations can cover costs such as child care scholarships, teacher salaries and building improvements.

“If parents had to pay $50 million more for child care, I don’t know what they would do,” Higgins said.

The tax credit, which first took effect in 1999 and has been reauthorized once, allows donors to claim an income tax credit worth up to 50 percent of their contribution. In other words, a donation of $200 to a qualifying child care provider would yield a state tax credit of $100 for the donor.

Donations to a variety of organizations — including child care centers, programs offering before- and after-school care, residential treatment centers and homeless youth shelters — are eligible for the credit.

The tax credit was suspended for a couple years during the Great Recession because slow-growing state revenue triggered a special provision in the law. The credit was restored in phases starting in 2013 and will expire in 2019 if it’s not reauthorized.

Given the state’s historically bipartisan support for the tax credit, advocates are hoping for a smooth passage.

“The reason why some people like tax credits … really comes from the fact that you’re just declining revenue,” said Bill Jaeger, vice president of early childhood initiatives at the Colorado Children’s Campaign. “You’re not necessarily building new government programs.”

And for taxpayers who make the donations, the philosophy is about “letting people keep more of money they’ve earned,” he said.

Currently, there is no organized opposition to renewing the tax credit for another 10 years.

Still, advocates know there are many demands for state dollars.

“We, in early childhood, are truly competing … with potholes or K-12 education,” Higgins said. “We just want to hold onto what we have.”

Colorado is one of only a handful of states that offer tax credits to individuals or businesses that donate to child care providers or related programs, according to the National Conference of State Legislatures. Oregon, Mississippi, Louisiana and Pennsylvania all have some version of a contribution credit, though generally the parameters are more restrictive than in Colorado.

Tami Havener, who leads a nonprofit that offers full-day preschool and a host of other early childhood services in Steamboat Springs, believes the tax credit encourages supporters to donate more than they otherwise would.

“I think it definitely makes a difference in them deciding how much they can give,” she said. “It allows them to be more generous.”

The Family Development Center where Havener is executive director raises about $110,000 a year — in amounts ranging from $25 to $30,000. The money helps pay for need-based scholarships, teacher training and extra staff so that student-teacher ratios stay low.

The preschool enrolls 80 students, about one-third of whom come from low-income families.

Havener said she’s gotten more savvy in recent years about advertising and explaining the credit to donors because she realized that some didn’t understand the financial benefits.

Now, in addition to helping specific child care providers, some groups envision the credit as a way to get communities to collaborate on larger child care initiatives. The idea is to use the credit as a rallying point for donors interested in pooling their resources for big projects — say, building a child care facility in a neighborhood without one.

“This is no silver bullet by any stretch,” Jaeger said. “It’s a tool in the toolbox.”