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ECE Compensation & Policy Options for Louisiana

ECE Compensation & Policy Options for Louisiana. Presentation by Louise Stoney, Alliance for Early Childhood Finance to Louisiana Children’s Cabinet Advisory Board November 21, 2013 Baton Rouge, Louisiana. What is the most important indicator of a high-quality early learning program?.

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ECE Compensation & Policy Options for Louisiana

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  1. ECE Compensation & Policy Options for Louisiana Presentation byLouise Stoney, Alliance for Early Childhood Finance to Louisiana Children’s Cabinet Advisory Board November 21, 2013 Baton Rouge, Louisiana

  2. What is the most important indicator of a high-quality early learning program? The TEACHERS who interact with children every day! • Highly skilled teachers and age-appropriate curricula • A language-rich environment • Warm, responsive interactions between staff and children • Small class sizes and high adult-to-child ratios

  3. High Turnover = Poor Quality In Louisiana the median child care center turnover rate is 33% for lead teachers and 50% for assistant teachers • Centers with high turnover have lower levels of quality, less favorable teacher-child interactions. • Children in programs with high teacher turnover often have lower levels of language, cognitive and social development

  4. School Readiness Tax Credits An innovative approach that makes a real difference…

  5. Impact of SRTC Participation in LA Career Lattice has more than tripled since the SRTC was implemented.

  6. But the wage gap is still large, especially when benefits are included…

  7. When benefits are included, filling the wage gap feels impossible

  8. What to do? Meaningful steps toward narrowing the wage gap can be made if Louisiana is willing to: • craft a multi-faceted strategy to increase revenues and enrollment in market-based ECE; and, • strategically link dollars to quality standards.

  9. The Iron Triangle of ECE Finance • Ensure full enrollment – every day, in every classroom • Collect tuition and fees – in full and on-time • Revenue covers per-child cost (tuition, fees + 3rd party funding)

  10. “Iron Triangle” Approach: 95% enrollment, 2% uncollectible debts • Very difficult to achieve with high subsidy co-pays, low absence policy & no targeting • Very difficult to achieve in smaller centers

  11. The Iron Triangle of ECE Finance • Ensure full enrollment – every day, in every classroom

  12. Enrollment Affects Cost of Care

  13. The Iron Triangle of ECE Finance • Collect tuition and fees – in full and on-time

  14. Family Co-Payments Must be Affordable

  15. Affordable Co-Payments: Based on % of Family Income

  16. The Iron Triangle of ECE Finance • Revenue covers per-child cost (tuition, fees + 3rd party funding)

  17. Base case shows net revenue before provider SRTC • Typical centers lose money • Higher levels of quality have worse financials • Adding SRTC helps improve the picture

  18. “Iron Triangle” Approach: 95% enrollment, 2% uncollectible debts • Very difficult to achieve with high subsidy co-pays, low absence policy & no targeting • Very difficult to achieve in smaller centers

  19. Shared Service Alliances (local or regional) • Administrative services – data on cost per child, strong fiscal management/oversight • Fund development – collaborative fundraising for shared costs • Staffing – shared staff across sites (admin back office, floaters, curriculum/PD support, shared director in small sites, etc.)

  20. Recommendations • Increase the Value of School Readiness Tax Credits for Teachers and Directors • Revise CCAP policy to: • Raise rate ceiling • Lower parent fees (base on % of income vs price of care) • Base reimbursement on enrollment vs attendance (which is current policy in public schools & Head Start) • Consider child development needs when determining eligibility

  21. Recommendations • Focus CCAP dollars on high-quality ECE programs • Require minimum star-rating to participate and gradually raise the floor • Acknowledge that full enrollment is a financing strategy • Establish contracts for high-quality providers • Require Pilots to fill existing high-quality slots before opening new ones • Promote Shared Service Alliances

  22. Trade-Offs • Progress will not be easy, and it will require some tough trade-offs • In order to boost quality you will most likely need to reduce the number of children you serve • In order to raise wages and keep high-quality programs full you will need to ‘shrink’ the number of programs that receive subsidy dollars • These trade-offs are worth it; they are the price of progress

  23. For Further Information www.opportunities-exchange.org www.earlychildhoodfinance.org

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