SPECIAL REPORT: MI falling behind other states in early childhood funding

By Melissa Preddy

As advocates for pre-school education and intervention rev up nationwide for the new decade’s initiatives, some state budget woes are short-circuiting access to programs aimed at getting infants and toddlers off to a good start.

Even in states that managed to preserve funding when budgets were enacted, programs are under pressure. Mid-year reductions in Fiscal Year 2010 spending plans — either through targeted or across-the-board cuts — will affect programs, services and workers. Most states are trying to spare K-12 education, according to National Conference of State Legislatures (NCSL). But a number of childhood intervention programs that were just gaining momentum are being undermined by the fiscal crisis.

The Pew Center on the States says total state investments in pre-K will be effectively flat in FY2010, rising slightly more than 1 percent to $5.3 billion. That’s according to a new report by the Pew’s Pre-K Now campaign, Votes Count: Legislative Action on Pre-K Fiscal Year 2010.After accounting for inflation, that is a decline in real dollars devoted to pre-K.

Michigan was among 10 states actually lowering funding for 2010 — on top of some of the nation’s deepest 2009 decreases in child care appropriations. The nine others making cuts: Connecticut, Illinois, Louisiana, Massachusetts, New York, North Carolina, Ohio, South Carolina and Washington.

Interestingly, according to the report, among the states suffering the 10 worst budget shortfalls at the time of the study, (measured as a percentage of the budget, Michigan is not among them), only Connecticut and New York approved a cut to early education programs.

“The economy is driving a lot of Michigan’s challenges, but I don’t think that is all of it,” said Lisa Klein, executive director of the non-profit Birth to Five Policy Alliance in Chicago. The alliance is a nationwide grant-making body that distributes funds from organizations such as the Kellogg Foundation and the Bill and Melinda Gates Foundation.

“(It) didn’t happen in every state with a budget crisis. It’s a matter of priorities, and of public and political will.”

Ohio’s cut is estimated to deny preschool to the largest number of children, at least 12,000.

Other findings of the Pew Pre-K report include:

Michigan: Falling Behind

Michigan stands out in some studies as cutting deeper than other troubled states in recent years.

Recent budget cuts here are a setback to the promise of reinvigorated efforts that followed Gov. Jennifer Granholm’s 2005 launch of the Early Child Investment Corporation (ECIC) to coordinate and guide state and local efforts.

The prolonged recession, including the nation’s highest jobless rate and the seismic changes within the auto industry, has sapped billions from state coffers.

Last fall, lawmakers averted a $103 million measure that would have eliminated pre-K care for more than 30,000 at-risk 4-year-olds statewide, among other proposals to cut early-childhood funds.

Instead, the state settled on a less-drastic reduction that nevertheless will pull funding from Great Start programs that served several thousand pre-schoolers. Michigan cut non-school-district agency funding for the Great Start Readiness Program by half, to $7.6 million. That money goes to a variety of pre-school providers statewide, many operated by universities and community college or local human services agencies. Another $88 million that goes to programs run through school districts was left intact, although the districts were given the option to repurpose the money for non-pre-school needs. At latest count about $8 million to $10 million of that $88 million was being redistributed, according to the state Office of Early Childhood Education and Services. Low-income child care subsidies also were cut by $113 million.

These reductions are a blow to early childhood advocates, coming on top of decreases in the FY2009 budget. State legislators approved more than $27 million in cuts to child care and home visiting programs for at-risk families, according to a tally by the National Conference of State Legislatures.

Strong Starts Matter

There is little argument among experts in the value of early childhood intervention, which some economists have called the smartest investment for public dollars.

“Early childhood programs used to be seen as more of an entitlement,” said Cornelia Grumman, executive director of the First Five Years Fund. “Now there is a huge body of research showing the benefits, and we see it as fundamental education reform.”

Rob Grunewald, associate economist for the Federal Reserve Bank of Minneapolis, has produced noted early-childhood research. He said that longitudinal studies show that early childhood programs targeting at-risk and low-income children demonstrate a variety of long term benefits. They include better school performance, higher high school and college graduation rates, less crime and higher earnings that lead to more tax revenue for the state.

“We calculate a 7 percent to 20 percent return on investment,” Grunewald said. “It’s a much higher return than traditional economic development tools, like the use of preferential tax treatment to persuade companies to relocate to the state, for example. Those returns are often as low as zero percent.”

“And it’s important to note that most of the benefits accrue to the general public, rather than the recipients of the services,” he added.

The early intervention leads to significant future cost savings in addition to social benefits. Fewer taxpayer dollars are required for prisons, law enforcement, social services and other public spending when individuals are more productive.

It’s true that during an economic slump, policymakers tend toward spending that will yield quick results. But it’s important to keep in mind that with funding for early childhood programs, “not all of the benefits are 15 or 20 years down the road,” Grunewald said. “A well-functioning child care system allows parent-employees to be more effective in the workplace today. That’s key. And the early childhood sector is a large employer itself and represents a significant part of the economy.”

Indeed, the National Association of Child Care Resource and Referral agencies reported in its “State Budget Cuts: America’s Kids Pay the Price” study earlier this month that in the U.S., child care is a $500 billion-a-year industry supporting some 15 million jobs.

How Michigan Ranks

In 2008, Michigan ranked 16th in state spending on pre-K programs for 4-year-olds, at an average of $4,230 per child enrolled, according to the National Institute for Early Education Research at Rutgers University in its most recent State Preschool Yearbook.

That’s not counting additional funding from federal or other sources; when those dollars are added in, Michigan drops to the 23rd spot in total spending.

Only 18 percent of 4-year-olds were being served by the programming evaluated in the yearbook, with another 16 percent of 4-year-olds participating in Head Start.

Researchers say some of the remaining 64 percent of kids may be in private programs, but currently there is no tracking mechanism in place.

Analysts emphasize that spending doesn’t necessarily correlate to results. While long-term studies are few and anecdotal, benchmarks like teacher credentials, class size, meals and pupil-to-teacher ratios are used nationwide as short-term quality benchmarks.
In the 2008 study, top-spending New Jersey, at $10,989 a year per pre-school enrollee, met 8.5 of 10 criteria. Connecticut, at $9,393 per pupil, achieved six of the quality standard, while Ohio achieved only 4.3 despite spending $7,260 per child enrolled. Michigan met eight out of 10 benchmarks despite ranking 23rd in spending at $4,230.

“We aren’t looking at dollars spent as much as ‘What are we spending it on,” said Klein. “Just as with K-12 education, spending more money doesn’t necessarily guarantee results.”

Cuts in Early-Childhood Funding

The National Conference of State Legislatures found in an extensive study based on FY2009 budget appropriations that Michigan was among several states that decreased funding in one or more key early-childhood areas.

According to the NCSL’s Early Care and Education State Budget Actions FY 2009 report:

Child care: Michigan cut the most dollars of all states reporting from its child care appropriations, reducing spending by $25.5 million or 8.6 percent. On a percentage basis, however, six states slashed more deeply, including Mississippi, with a 72 percent decrease, and a 21 percent cut in Georgia.

Pre-Kindergarten: Michigan increased funding for the Early Childhood Investment Corporation Great Start Collaborative by $5 million or 5 percent.

Most states boosted similar spending or held steady; only three – Maine, Nebraska and South Carolina – cut funding by single-digit percentages.

Home visiting: Michigan cut its Strong Families, Safe Children funding by $2 million, or 13.5 percent, but left its Zero-to-Three program intact at nearly $6.5 million, the NCSL reported. Like similar programs nationwide, the home-visit services help with family wellness, parenting skills and school readiness from infancy onward. The state’s Nurse-Family Partnership lost $21,400 or 2 percent of its budget. Overall, the state decreased funding for home-visit programs by more than $4 million, or nearly 20 percent.

Fourteen of the states reporting to the NCSL increased funding for home visits, while nine held flat at FY2008 levels. Ohio topped the gainers, with an additional $9.9 million in its appropriation, followed by Minnesota at $8.2 million and Illinois at $5.2 million.
It should be noted that the NCSL rankings were established based on states’ original FY2009 budgets; a number of states did contemplate adjustments as the financial crisis deepened, but the net effects were not factored into this study.

Another variable, economist Grunewald points out, is that some states – like Michigan – target at-risk and low-income children, while others are working toward a goal of universal pre-school participation. Those disparities plus each state’s unique network of public-private partnerships, local programming and integration of federally funded programs make apples-to-apples comparisons difficult.

“Nevertheless, the rankings do illustrate a state’s support for and investment in pre-school,” he said.

Commitment to Progress

Despite setbacks, early intervention advocates see pockets of hope on the horizon.
National and regional advocacy groups like the ECIC are pushing forward with public awareness campaigns leading into the 2010 elections, and are hopeful that a greater awareness of the issues at the federal level will help with funds and spur more public-private initiatives as state budgets regroup from the recession.

“We know economic woes in Michigan are making it even harder to put high quality programs and services in place for the state’s youngest and most vulnerable young children,” said Klein of the Birth to Five Policy Alliance. “The good news is that there is excitement, activism and enthusiasm around a birth-to-five initiative in Michigan, That way when the budget is better, young children will be the first to benefit.”