Final budget’s early childhood investment not nearly enough to support the cost of quality

by | May 3, 2018

Recent blog posts have covered the budget’s impact on both K-12 and postsecondary education.  The state budget also significantly impacts the ability of public preschool and private childcare to provide critical services to Kentucky’s youngest learners.

The Prichard Committee’s 2017 report – Building Blocks: The Kentucky Early Childhood Cost of Quality Study – estimated the level of investment necessary to provide high quality early childhood programs and found Kentucky to be far behind.  We used this information to make a strong case during the legislative session for the state to increase investments in both preschool and childcare.

Unfortunately, the enacted budget for the next two years falls significantly short – and actual goes backward for preschool – of what is necessary to ensure high quality programs are available to all children.

Public Preschool

The Kentucky Preschool Program serves nearly 10,000 3- and 4-year olds with special needs and over 9,000 4-year olds with family incomes below 160% of the federal poverty line. For 2018, Kentucky funded school districts at a per-child rate of $7,810 for children with severe or multiple disabilities and $4,100 for other eligible children.  These amounts were based on total funding of $90.1 million with $82.6 million available for per-child reimbursements.  $7.5 million was available for incentive grants to support partnerships between preschool and childcare.

To fund the minimum level of quality, per-child rates need to be at least $8,793 for children with severe or multiple disabilities and $4,961 for all other eligible children.  At current enrollments, this would require a minimum investment of $96.5 million.  The enacted budget, unfortunately, reduced funding for the preschool program by 6.25% or $5.7 million.  This provides total funding in each of the next two years of $84.5 million with $77 million available for per-child reimbursements and $7.5 million to support the partnership grants.

Despite a significant increase in funding in 2016 to support greater access, Kentucky has not seen participation in preschool rise fast enough, but they are increasing slightly.  With budget reductions, even flat enrollment will result in a decline in per-child funding – the wrong way to go to support high-quality programs.

Source: Prichard Committee Staff Analysis of KDE 2017 Preschool Staff Note; Note FY 2019 and FY 2020 enrollments are flat-lined estimates to show impact of budget cuts.

Childcare Assistance

The Child Care Assistance Program (CCAP) helps working families with incomes below 160% FPL afford care for nearly 27,000 Kentucky infants, toddlers, and young children. With federal funds from the Child Care Development Fund (CCDF) program and state General Fund dollars, Kentucky reimburses child care centers for providing care and education to eligible children. The rates vary by age, region, and urban/rural. In many centers, parents have a co-pay as well as the “double co-pay” – the difference between private tuition and reimbursement rates.

The Cost of Quality Study estimated that CCAP rates should be raised significantly for higher levels of quality at all ages and at all levels of quality for infants and 1-year olds.  For example, in some areas of the state, reimbursement for infants at the lowest level of quality is $12/day less than what it should be at a minimum and $37/day less than what it would need to be for the highest level of quality.

On average, to fund the middle level of quality, Kentucky would need to increase per-child reimbursements by approximately $12/day requiring nearly $88 million in increased investment.  This is a significant amount and the hope for this session was to get policy makers to start investing strategically on this path.  Unfortunately, this commitment was lacking and it appears that state investment in CCAP is essentially the same as the previous budget – $26.3 million annually in General Funds.

There is perhaps good news in the two-year federal budget deal reached in February.  The agreement reached by Congress would nearly double the funds available to states through the Child Care and Development Block Grant (CCDBG).  Some estimates put the impact to Kentucky at $51 million which will be positive if the state can use some of these funds to support high-quality providers serve more children.

Bottom Line

With only 50% of Kentucky’s children arriving in kindergarten ready for early success, greater effort is needed to ensure that all children are given the opportunity to succeed.  The research reinforces the fact that investments in high quality early childhood education and care programs for at-risk children is not only a solution for reducing achievement gaps and improving academic performance, but pays long-term dividends beyond school.  We needed greater commitment from policy makers to make the critical investments necessary, as well as greater commitment from communities to find new ways to deliver the highest quality early childhood programs.

Want Further Detail?

View the Cost of Quality Study and all the associated background information here.

ABOUT THE PRICHARD COMMITTEE

Since 1983, the Prichard Committee has worked to study priority issues, inform the public and policy makers about best practices and engage citizens, business leaders, families, students, and other stakeholders in a shared mission to move Kentucky to the top tier of all states for education excellence and equity for all children, from their earliest years through postsecondary education.

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