Paying for pre-K

To fund pre-K, advocates in Indiana pitch tax credit scholarships, ‘pay for success,’ tax hikes

PHOTO: Scott Elliott / Chalkbeat
Preschoolers at Shepherd Community Center.

Early childhood education advocates are suggesting new ways for the state to fund prekindergarten — by bringing in investments from local communities and corporations.

In a new report released Tuesday by the Indiana University Public Policy Institute and Early Learning Indiana, advocates recommended the state look into tax credit scholarships, social impact bonds, food and beverage tax revenues, or local referendums to pay for expanded pre-K access.

“I don’t think it should be shouldered just by the government or by the private sector alone,” said Madeleine Baker, CEO of the Early Childhood Alliance in Fort Wayne, who co-chaired the report’s advisory board. “I think there needs to be partnership across the board. Everybody has to have skin in the game.”

Tuesday’s report kicks off a renewed campaign to expand early childhood education in Indiana, which is shaping up to be a budget battle in the upcoming legislative session that starts in January.

It could be fairly easy for the state to launch tax credit scholarships for pre-K programs, since Indiana already spends $14.5 million on the school choice strategy. Businesses and individuals receive a 50 percent tax credit on donations to scholarship funds for students from low- and middle-income families to cover the cost of private school tuition in grades K-12.

With social impact bonds — often called “Pay for Success” models — private investors contract with the government to provide money up-front for early childhood initiatives, which is paid back if the programs are successful. Illinois, along with Idaho and Utah, uses the strategy.

Passing a local property tax increase or an option income tax is an increasingly popular option for funding early childhood education with long-term revenue. But raising taxes is a tough sell in Indiana, and likely more so in the state’s rural areas.

An effort to pass a local referendum for early childhood education in Indiana has failed before. In Columbus, voters refused to back a referendum in 2012 that would have supported a public-private partnership widely pointed to as a success.

The other new ideas for funding streams — tax credit scholarships and social impact bonds — also come with trade-offs, said Bruce Atchison, principal of early learning for the Education Commission of the States.

“If you have a big corporation that’s going to put half a million dollars into that, that’s great,” Atchison said. “But when the corporation moves from the state or has a downturn in profits, it might not be so willing. So the long-term sustainability of the social impact bond piece becomes a concern.”

While the report did not include a big-picture estimate for how much more money the state should spend on pre-K, it did put a price tag on the cost of not investing in early childhood.

Employers in Indiana lose $1.8 billion each year from workers taking time off or leaving their jobs because of child care issues, the report said. Those absences are equivalent to losing 31,000 full-time employees and result in costs to businesses for paying for parents’ time off, hiring and training new workers, and paying for overtime or temporary workers.

The report also said the state loses $1.1 billion in economic activity each year from people reducing their spending if they lose out on wages because of child care issues.

It’s a popular argument in support of pre-K: Early childhood education benefits the workforce, both this generation and the next. Advocates say increasing high-quality pre-K seats helps parents stay or get back into the workforce while preparing young children with essential skills.

“Economic development speaks to Republicans,” said former Indianapolis mayor Greg Ballard, a Republican himself who championed pre-K and co-chaired the advisory board. “I’m hoping they look at these figures and say, hey, maybe that’s something we should be looking at.”

He added that he hopes the ideas for public-private partnerships — which he used to launch Indianapolis’ pre-K program — will also speak to the Republican lawmakers who dominate the legislature.

“I don’t think there’s yet a general understand that this should be done for many reasons, not the least of which is economic development,” Ballard said. “It’s just not in our psyche yet that this is part of who we are as Hoosiers.”

The state’s pre-K program, known as On My Way Pre-K, is in the fourth year of its five-year pilot. At a cost of $22 million per year, it is available in 20 counties and pays for roughly 4,000 4-year-olds from low-income families to attend the high-quality pre-K provider of their choice.

If the state is to continue funding the pre-K program, advocates’ best shot for securing money is in the upcoming session, when lawmakers craft the state’s two-year budget.

Expanding pre-K is likely to have the support of Republican Gov. Eric Holcomb, who pushed in 2017 for an earlier expansion of the program to more rural areas of the state.

The issue has already won the support of Republican state schools chief Jennifer McCormick, who said earlier this month that too many Hoosier children enter kindergarten unprepared.

Advocates cite research showing the long-term returns on investment of pre-K and a study showing the success of pre-K in Oklahoma. They even point to research showing where Tennessee’s pre-K program fell short as an example of how important it is to maintain high quality standards for pre-K.

A recent report also showed that universal preschool in Washington, D.C., helped more mothers return to the workforce.

But funding is still likely to be a sticking point: How much money will lawmakers be willing to invest in pre-K?

“In a budget year, everyone has a request for something,” said Tim Brown, general counsel and director of policy for the Indy Chamber, in an interview last month with Chalkbeat.

Advocates say they are still struggling to convince people that pre-K is a worthwhile investment that amounts to more than daycare.

Indianapolis Mayor Joe Hogsett, a Democrat, said he believes pre-K has already proved its worth. Researchers have been studying the early outcomes of the state’s pilot program, which is showing both academic gains for children, and an increase in work and education opportunities for parents.

“I think the results of those programs are self-evident, that they do make a critical difference to get our young people off to a great start in life,” Hogsett told Chalkbeat recently. “So I hope that those results will speak volumes as the legislature crafts its next biennial budget.”

Planning mode

As lawmakers consider major preschool expansion, Colorado providers want more than just extra seats

PHOTO: Ann Schimke

With Gov. Jared Polis’ proposal for the biggest expansion of Colorado’s state-funded preschool program in its 30-year-history, many early childhood educators are cheering the possibility of 8,200 new preschool slots for at-risk children.

But they’re also asking hard questions about how providers will find the staff and space to create new preschool classrooms, and whether state leaders will reshape the program to broaden its reach and intensity. Suggestions from the field include expanding the definition of at-risk, accepting more 3-year-olds, offering more full-day slots, and rewarding top-rated providers with more money.

These discussions echo debates about preschool quality and access nationally as more state leaders prioritize early childhood education, and as public preschool programs from New York to California attempt massive scale-ups.

Research shows that early childhood programs can produce huge long-term gains for children, particularly those from low-income families. But there’s a caveat: The programs must be high-quality.

In Colorado, Polis’ preschool proposal hinges partly on his plan to offer free full-day kindergarten statewide. That’s because 5,000 of the new preschool slots would be funded with money currently earmarked for full-day kindergarten through a special pool of flexible early education dollars. Lawmakers likely won’t make final decisions on the full-day kindergarten and preschool expansion plans until late spring.

In the meantime, preschool providers are weighing the pros and cons.

One of them is Lynne Bridges, who runs a highly rated preschool designed to look like an old schoolhouse in downtown Pagosa Springs in southwest Colorado. It’s called Seeds of Learning and serves children from tuition-paying families and about two-dozen preschoolers who qualify for public dollars through the Colorado Preschool Program.

While Bridges is thrilled with Polis’ support for early childhood education, she’s frustrated, too, that the state’s preschool program doesn’t recognize top programs like hers with extra funding.

“It’s almost like this high-quality program I’ve created …. It’s my burden,” she said.

Bridges’ program holds a respected national accreditation and also has a high rating from the state through its Colorado Shines rating system. She fundraises constantly to fill the gap between her government allotment and the cost of providing preschool for her at-risk kids — the ones she said have the most to gain from a high-quality program.

“There’s only so much money to be had in a rural community,” Bridges said. “This shouldn’t be me laying awake at night trying to help these families.”

The $111 million Colorado Preschool Program serves about 21,000 preschoolers statewide — most of them 4-year-olds in half-day slots — as well as 5,000 kindergarteners in full-day programs. Most of the program’s slots are offered in public school classrooms, though some are in community-based facilities.

On average, providers get about $4,100 per state preschool slot, though the amount varies based on a district’s size, share of low-income students, and cost of living.

Jennifer Okes, chief operating officer at the Colorado Department of Education, said the state’s finance formula allocates preschools half per student of what’s earmarked for first- through 12th-graders.

That formula doesn’t account for preschool quality, she said.

“I guess you could take preschool funding out of [the Public School Finance Act] and fund it separately. That would be a big statutory change.”

A separate state program that provides subsidies to help low-income families pay for child care works the way Bridges wishes the Colorado Preschool Program did, but it’s governed by a different state department and set of rules.

Leaders in the suburban Westminster school district north of Denver, where three-quarters of preschoolers are funded through the Colorado Preschool Program, said Polis’ proposal fits with the district’s own plans to expand early childhood options.

“I’m all for it,” said the district’s Early Childhood Education Director Mat Aubuchon, of the state preschool expansion. “I’m just curious what latitude we’ll get as districts.”

Aubuchon said if the state funds more slots, he hopes more can be merged to create full-day preschool slots. Currently, state rules allow only a small fraction of slots to be combined.

In addition, he wants more leeway in the state’s primary eligibility criteria, which gives preference children from low-income families, those in unstable housing, or who have speech or social difficulties, among other factors.

“I would like to see a little bit more pre-academic stuff in there,” said Aubuchon.

For example, children likely to be at risk for later reading struggles, based on results from a pre-reading assessment, should be given greater consideration, he said.

Aubuchon said if Polis’ plan comes to fruition, he’d like at least 100 to 150 more state preschool slots — maybe more if districts get additional flexibility to make full-day slots. He said the district will likely be able to find space for additional preschool classrooms.

Christy Delorme, owner and director of Mountain Top Child Care in Estes Park in northern Colorado, would like more state preschool slots, too.

She knows some commercial child care centers aren’t happy about Polis’ preschool expansion plan “because it takes away those paying slots,” but said she thinks it’s a good idea.

“Most parents can’t afford child care,” she said. “The more kiddos we can get into early education programs the better off our society will be.”

Delorme doesn’t have the room for a new classroom at Mountain Top, but like Aubuchon, wants the option to create full-day slots for the children she’s already serving. Currently, the 10 children in half-day slots funded by the Colorado Preschool Program rely on scholarships from a local nonprofit to stay at Mountain Top all day. If they become eligible for full-day state slots, that scholarship money could be rerouted to at-risk 3-year-olds,

One challenge that many preschool providers will face if there’s a sudden influx of new state-funded preschool slots will be hiring qualified staff for new classrooms.

That very problem is what led Bridges, of Seeds of Learning in Pagosa Springs, to cut her program down from four classrooms to three a few years ago. Turnover was high and she couldn’t find reliable substitutes.

With the switch to three classrooms, she also raised wages. Today, a lead teacher with a bachelor’s degree makes about $22 an hour, competitive pay in a community where her workers sometimes used to leave for jobs at the local Walmart. Today, Bridges has no problem with turnover.

Delorme, whose teachers start at $15 to $17 an hour, agreed that the field’s low pay makes it tough to find qualified staff.

“Education in general, it’s hard to recruit, but does that mean I wouldn’t want to expand my program because of that?” she said. “No.”

Race for mayor

How to help Chicago’s younger learners? Mayoral frontrunners skip a chance to say.

PHOTO: Stephanie Wang

The challenge of mending and strengthening Chicago’s network of care and education for its youngest residents defies instant solutions, but four candidates for mayor agreed Monday on one point: The city needs to care for its child care centers rather than imposing more burdens on them.

And the city should include those crucial small businesses, which often anchor neighborhoods, in its growing pre-kindergarten system.

Related: Why Rahm Emanuel’s rollout of universal pre-K has preschool providers worried

At a forum Monday at the University of Chicago on the topic of early childhood education, candidates addressed how city government can stitch together a stronger early learning system. Chicago’s mayoral election is Feb. 26.

Chicago is in the first year of a four-year universal pre-kindergarten rollout, and the city’s next mayor will determine much of the fate of the program. About 21,000 children have enrolled out of an estimated 45,000. And cost estimates are now north of $220 million, much of it federal and state money earmarked for early childhood expenditures. But the mayor can direct how that money is spent.

The forum attracted four candidates: former federal prosecutor Lori Lightfoot, former Chicago schools CEO Paul Vallas, state representative and former teacher La Shawn K. Ford, and John Kozlar, a University of Chicago graduate who, at 30, is the youngest candidate in the race.

Four candidates considered front-runners — Toni Preckwinkle, Susana Mendoza, Bill Daley and Gery Chico — didn’t attend. Nor did six more of the 14 candidates.

All of the mayoral candidates who answered said they would continue to support Chicago’s universal pre-K expansion but did not specify how.

The event was organized by Child Care Advocates United, a statewide alliance of child care providers who banded together four years ago when the state budget crisis was forcing many providers and child care agencies to cut back or close.

The central topic of conversation was how city government can build a stronger early learning system. Several questions revolved around issues faced by for-profit and nonprofit day care owners and preschool operators who are facing teacher shortages, budget pressures, and a churn of students. Some advocates say Chicago’s rollout of universal pre-K has made a operating a difficult business even more tenuous, as they lose children and revenue to Chicago Public Schools.

A Chalkbeat analysis of data published last week showed that public school preschool programs are at 91 percent capacity, while one in five seats at community-run preschools and centers is empty.

The candidates Monday offered different suggestions for alleviating the pressure.

Related: Care about schools? Read Chalkbeat Chicago’s voter guide to the mayor’s race. 

“We have to end this fight between Chicago Public Schools and (community) providers. It is killing an industry,” said Ford, a state legislator who described the budget pressures many providers faced under former governor Bruce Rauner, when Illinois did not pass a budget for more than two years.

A September report from the Illinois Department of Children and Family Services, which tracks openings and closures among licensed daycare facilities, shows a loss of 3,400 licensed facilities statewide from 2010 to 2018.

“Chicago Public Schools cannot do (preschool) cheaper, and it cannot do it better,” said Vallas, also a former budget director for the city of Chicago, who has put out a detailed prenatal-to-preschool platform that starts with universal prenatal care and a detailed menu of services and supports for children birth to age 5.

“The challenge with the universal pre-K program that Rahm Emanuel and (schools chief) Janice Jackson rolled out is that there was no engagement with community-based providers,” said Lightfoot, who questioned the timing of the May 2018 announcement just weeks before a Chicago Tribune series cast a spotlight on a pattern of mishandling student sexual abuse cases in the K-12 system. “This program was ill-conceived and rolled out in spring to be a distraction to the sex assault investigation about to be unveiled by the Tribune.”

At the forum, held in the auditorium of the Logan Center for the Arts at the University of Chicago, Vallas also spoke about creating incentives to entice more prospective teachers into the field, including grow-your-own programs that target parents.

He also described a system of startup grants and opportunity zones that would make it easier for new businesses to take root and tax breaks for providers who serve a variety of children well.

Ford advocated pressuring state legislators to increase reimbursement rates to providers, which could be used to increase teacher pay, and setting aside tax-increment financing, or TIF, dollars for early childhood businesses. And Lightfoot talked about converting some of the schools that Chicago has closed into job training and early childhood centers.

“The policy that has been rolled out is not equitable and not sustainable,” she said of Chicago’s universal pre-K rollout. “We need to work in partnership with our communities.”

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