Financing Early Education

Preschool Policy Briefing June 22, 2004

W. Steven Barnett, Ph.D.

National Institute for Early Education Research

Copies and details available from: www.nieer.org

(732) 932-4350, sbarnett@nieer.org

Presentation Overview

Why does early education financing matter? Access is incomplete and unequal Quality is too low Families struggle with the cost Voters want government to step in

America can afford a better policy Total cost is low Public and private sectors can share costs The cost of missed opportunities is higher

America Faces Serious Challenges

Sustaining economic growth Increasing productivity and competitiveness Increasing educational achievement Meeting future public commitments

--Social Sec., Medicare & Medicaid 75% of 2040 budget

Ensuring a better future for America’s children

Early Education can be part of the Solution

Increases Educational Success and Adult Productivity Cognitive abilities, achievement, & school success Social behavior Employment, earnings, and tax revenue

Decreases Costs of Government Schooling (special ed. & grade retent.) Social services Crime Health care

Cognitive Readiness GapAbilities of Entering Kindergarteners by Family Income

40.0

45.0

50.0

55.0

60.0

Low est 20% 2nd Low est20%

Middle 20% 2nd Highest20%

Highest 20%

Reading

Math

GeneralKnowledge

School Readiness Gap

Abilities Scores

FamilyIncome

Social Readiness GapSocial Skills of Entering Kindergarteners by

Family Income

8.00

8.20

8.40

8.60

8.80

9.00

9.20

9.40

9.60

9.80

Lowest 20% 2nd Lowest 20% Middle 20% 2nd Highest 20% Top 20%

SocialSkills

School Readiness Gap

Social Scores

FamilyIncome

Costs of Early Education

The Cost of Early Education Depends on the Design Ages served Hours of the program Quality—teacher qualifications, class size, etc. Targeted or universal Systems costs--start up and infrastructure

What are benchmarks for cost? Per pupil costs of K-12 education: $8,733 Per pupil costs of Head Start: $6,934 Per pupil state expenditure on PreK: $3,455*

* Does not include local share of costs.

Early Education Finance in Perspective (FY 2005 Budgets)

American economy, annual GDP = $12.0 trillion

Federal annual spending = 2.4 trillion

State and local annual spending = 1.2 trillion

Social Security and Medicare = 800 billion

Agri-business subsidies = 15-20 billion

Head Start = 6.9 billion

State Pre-K = 2.5 billion

UPK = $10-30 billion

Revenue Sources

New taxes and gaming revenue

Borrowing (deficits, bonds for tax cuts, facilities)

Obtain more existing education funds (Title I)

Displace other noneducation spending (economic devel.)

Tax breaks

Parent fees (sliding scale, core v. care)

Conclusions

Access and quality problems require public finance

Quality pre-K for all is good national policy

We need a solution for everyone

The cost is modest

Options include tax increases, tax cuts, borrowing, spending shifts, and parent fees