Early Childhood

Democrats raise doubts about Ballard's preschool plan

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

Democrats who are wary of some parts of Mayor Greg Ballard’s blockbuster $50 million proposal to help more children attend preschool across Indianapolis will offer their own preschool expansion plan later this month.

While some of Ballard’s allies are charging that Democrats are playing politics and putting at risk opportunities for poor Indianapolis children, both supporters of his plan and some of those with reservations say they are optimistic that expanding preschool can still happen.

“My Democratic friends have been in favor of pre-K until Republicans say, ‘let’s do this,'” said City-County Council member Aaron Freeman. “Amazingly, it’s a fight. Everybody’s got to have an alternative plan. Frankly, I’m sorry, but the time for deal making and the time for alternative plans is kind of gone.”

Even so, Democrats and Republicans have been holding talks in search of a compromise.

“We are 100 percent committed to getting preschool done for our children and for our city for 2015,” Deputy Mayor Jason Kloth said.

From Ballard’s July announcement calling for preschool to be a central pillar in his plan to sustainably curb the city’s crime and education problem, there were signs that the political road ahead might not be smooth.

For instance, Council president Maggie Lewis and other prominent Democrats were noticeably absent from the announcement and soon after began raising concerns about Ballard’s preferred method of funding the program: eliminating the local homestead tax credit.

Ballard has argued that while cutting the homestead credit would cost some Indianapolis homeowners an average of $22 per year that they now save from their tax bills, it would be worth it to support 1,300 more spots for preschoolers and help local providers meet high-quality standards.

Democrats have countered that eliminating the tax credit would both cost some homeowners more and hurt the city’s 11 public school districts by also taking away more than $3 million they receive. But Ballard responded that the school districts would benefit significantly by enrolling more incoming students who were better prepared to start kindergarten because they had been to preschool first.

Council Vice President John Barth, a Democrat, said he plans to unveil an alternative to Ballard’s plan in time for the City-County Council’s next meeting on Sept. 22. Though Barth hasn’t finalized all the details of what his plan will entail, he’s sure that it won’t include using the elimination of the homestead tax credit as a funding source.

“The resistance to that funding mechanism is not new and is well known,” Barth said. “I am working on a proposal that gets specific and into the weeds on how a pre-K program would work in Indianapolis.”

Ballard’s staff and some Republican council members said they are open to considering alternative funding plans if it can assure the preschool plan happens.

“We appreciate and welcome any and all ideas that Councilman Barth would propose,” Deputy Mayor Jason Kloth said. “The homestead tax is one sustainable source of funding preschool and putting more police officers on the street. However, we are open to any sustainable funding source and are eager to hear the Democratic counter-proposal for funding this.”

Kloth said he is in talks with Barth and others, including Lewis, to work through their differences with the mayor’s plan. Most of the negotiations are centered around how to fund the program, Barth said.

“To me, if we agree preschool is No. 1, then we need to re-balance the budget to demonstrate that,” Barth said. “That’s a painful process, but we’re working through that. I’m trying to navigate through the middle and get everyone on the same page.”

Republican Councilman Jeff Miller said he became a strong preschool proponent after he saw the learning gains his child made while attending a preschool program. He said he would be receptive to hearing an alternative to the mayor’s plan if it means more kids get to attend preschool.

Miller said there likely will be support for an alternative plan among Republicans on the council.

“For me, it’s never been about the funding having to come from here, here or here,” Miller said. “The funding has to come from a source that is viable. It felt like the homestead credit was a good way to go. But I’ll be the first to say that if there are other plans out there, I’m willing to listen to them.”

Others aren’t open to deal making.

Councilman Steve Tally, a Democrat, said he opposes the mayor’s proposal because of it will cost money that now goes to public schools, libraries and other services. Indianapolis Public Schools, for example, stands to lose $734,000 if the homestead tax is eliminated.

“In addition to increasing the tax burden on our residents, it disproportionately impacts people who live in very modest homes and our seniors who have paid their mortgages off in some of the most challenging neighborhoods,” Tally said.

Some councilmembers just think it’s time to eliminate the homestead tax credit for good.

“If there was a way to (fund preschool) with some other funding mechanism, I’d certainly consider it, but my concern is that any proposal that’s floated is going to be for the purpose of avoiding eliminating the homestead credit,” said Republican Councilman Will Gooden. “I’m afraid if they’re treated separately at this point, the can is once again going to get kicked down the road.”

Time is running out for the council to decide if it wants to use the tax credit elimination. By law, Kloth said, there is a Sept. 22 deadline to vote on the tax credit.

Meanwhile, education leaders and preschool advocates are waiting to see if the city will make a big commitment to preschool.

Ted Maple, president of preschool provider Day Nursery Association and a long time advocate for expanded preschool, said he doesn’t care how the city’s preschool program is funded as long as it is high quality.

“I’m hopeful we can come to an agreement as soon as possible,” Maple said. “We have too many children out there that need early childhood education. We as a community have waited too long to do the right thing for kids. If we put it off now, we’re at risk of putting it off again for a really long time.”

Sticker shock

In Illinois, child care costs eclipse rent, making it one of least affordable states  

The average annual cost of child care now outpaces what families spend on a year of rent in Illinois, according to a new report that examines child care costs nationwide.

Illinois is one of the 15 least affordable states in the country, according to the report from the Virginia-based nonprofit Child Care Aware of America. The nonprofit examined costs across the United States and adjusted them for median income and cost of living.

“Families are seeing that child care is a significant portion of the bill they have to pay,” rivaling the cost of college tuition, rent, and even sometimes mortgage payments in some areas of the country, said Dionne Dobbins, senior director of research at Child Care Aware.  

The average annual cost of center-based care for an infant in Illinois has reached $13,474 — which is a staggering 52 percent of the median income of a single-parent family in the state and nearly 15 percent of the state’s median married couple’s income.

That figure put it 13th among the least affordable states, which were ranked by the percentage of a single-parent family’s income spent on child care. Massachusetts topped out at nearly 65 percent of a single-parent family’s median income for center-based infant care.

In Illinois, care for toddlers and older children before and after school also consumed a greater percentage of a family’s income compared with other states. Illinois ranked 14th for toddler care as a percentage of median income, with an average cost of $11,982 for full-time toddler care at a center.

The state was among least affordable for the cost of three months of summer care.

 

Illinois offers a child care subsidy intended to offset the costs of care for low-income working families, but that program has been rocked by shifting eligibility requirements and compliance issues. Participation in the program has dropped by a third since 2015, when Gov. Bruce Rauner’s administration changed eligibility requirements.

Dobbins said that, across the United States, child care subsidy programs are under pressure as states tighten compliance and lower reimbursement rates. In some states like Illinois, rising minimum wages have rendered some families ineligible for subsidies or staring down co-pays that they can’t afford.

Dobbins said that nationally, only one in six children eligible for subsidized child care actually ends up using it.

 

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.”