Financing strategies: where do we go from here?
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Transcript of Financing strategies: where do we go from here?
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Financing strategies: where do we go from here?
Anne Mitchell
Louise Stoney
Alliance for Early Childhood Finance
State Child Care Administrators MeetingWashington, DCAugust 7, 2003
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TANF $
State pre-kindergarten $
Head Start partnerships
State-funded community initiatives (like
Smart Start)
Innovative sources (Financing Catalog)
The field has learned a lot about ways to increase revenue
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There is no silver bullet
There is no “pot of gold” at the
end of the rainbow.
There is no single solution
We need major REFORM
But we’ve also learned that it isn’t so easy…..
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We know a lot about mechanisms to increase revenue We don’t know enough about how to fit them together into a
finance system The current finance delivery system has serious flaws Pouring more money into a flawed finance delivery system
isn’t the answer ‘Tinkering’ with the current system will only result in modest
improvement
We don’t just need more money, we need finance REFORM
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High-quality early care and education SERVICES that:
offer children opportunities for early learning support families with a range of year-round,
full and part-day services provide comprehensive services to children
and families who need them retain and reward well-qualified staff
What are we financing?
Quality Early Care and Education
System
Quality Standards
Consumer Engagement
Ongoing Financial
Assistance
Support to Meet Standards Initially
Practitioner/Teacher
Engagement
Infrastructure to Maintain
Quality Standards
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Anearly care and education
SYSTEM!SYSTEM!
What are we financing?
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Many unconnected financing mechanisms
Several subsystems, but no discernible unified system of early care and education
What we have now is...
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What’s wrong?The price parents can afford to pay is less than the cost of quality ECE.
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What’s wrong? Public investment is uneven, nearly full support in some cases and limited or no support in others.
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What’s wrong?
Basing public subsidy on the price of services in a ‘free’ market is fatally flawed.
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What’s wrong?
Current funds do not serve all families.
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What’s wrong?
Current funding does not support the full range of child and family needs.
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What’s wrong?
There’s very little investment in infrastructure.
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What’s wrong?There’s accountability for quality and/or child outcomes in a few subsystems and none at all in others.
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What’s wrong?
It’s not a system, it’s a bunch of silos.
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Now is it clear why we need
Early Childhood Finance
REFORM?
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Principles of Reform Focus on all families, not just poor families. Everyone contributes. Fund services and infrastructure. Diversify sources and assume layered
funding. Combine portable & direct financing. Frame ECE as an investment. Incorporate accountability.
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Principles of Reform
Focus
on all families, not just poor families.
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Principles of Reform
Everyone
contributes.
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Principles of Reform
Frame early care and education as an
investment.
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Principles of Reform
Fund services
and infrastructure
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Principles of Reform
Diversify sources
and
assume layered funding
CACFP
Head Start
Preschool
CCDFCommunity FoundationEmployer Subsidy
The ECE Layer Cake
Parent Fees
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Principles of ReformCombine portable & direct
financing Portable financing is tied to a specific child or family &
follows them to the program/services they select
Direct financing directly supports an institution or industry
Cost/Price Analysis in Child Care and Higher Education.
13
87
58
0
10
20
30
40
50
60
70
80
90
100
To
tal Co
st
All child care centers 1993-94
All private non-profitcolleges 1995-96
Tuition &Fees
InstitutionalSubsidy
42
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Principles of Reform
Incorporate accountability –
connect funding to standards.
•Pre-K funding •Early Intervention•Professional Licensing•Early Childhood Food and Nutrition Programs
All linked to standards
Department of Education
•Tiered Rewards for child care linked to standards•Training and quality grants linked to standards
Department of Public Welfare
Agreement with Federal Regional Office to create administrative/fiscal links to common standards
Head Start
Agreements with United Way, community foundations, etc. to link $ to common standards
Private Sector •Campus-based child care programs•Practitioner education
All linked to standards
Higher Education Funds for construction of ECE facilities linked to standards
Quasi-Public Construction
Authority
Funds for child care centers at the courts or delinquency prevention linked to standards
Judiciary/Office of Court
Administration
•Higher DCTC linked to standards•ECE Occupational Tax Credit linked to standards•Other business or individual tax benefits linked to standards
Department of Tax and Finance
•ECELS training•Healthy Child Care America
All linked to standards
Department of Health
Learning Guidelines (Outcomes for Children)
Standards for
Practitioners
Standards for
Programs
Quality Early Care & Education System
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Reform requires a new kind of Leadership
Stay focused on system REFORM
Remember that form can follow function
It won’t be easy: change is always uncomfortable
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Leadership for innovation in finance
Colorado Market-driven strategies
(Educare, School Readiness Tax Credit & grants) and
System reform (consolidated pilots, learning clusters).
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Leadership for innovation in finance
California
Paid Family Leave, financed through the Temporary
Disability Insurance system.
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Leadership for innovation in finance
Tax policy in New York (DCTC & Occupational Tax Credit) and Maine (Quality tax credit)
Community reform in many places (North Carolina, Kansas City, Rochester NY, Seattle).
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If you want to join the Early Childhood Finance “Learning Community”...
Go to:
www.earlychildhoodfinance.org