Issues to Consider in Developing a Finance System for Preschool

1. Issues to Consider in Developing a Finance System for Preschool Lori Goodwin-Bowers – Colorado Preschool Program Supervisor, CDE Charlotte Brantley – President and CEO, Clayton Early Learning John Augenblick – Partner, Augenblick, Palaich and Associates November 8, 2011

2. Early Childhood Education in Colorado: The Colorado Preschool ProgramLori Goodwin-Bowers – Colorado Preschool Program Supervisor, CDE

3. Colorado Preschool Program • The Colorado Preschool Program was created in 1988 to address the needs of children who may not be prepared to be successful in school. • Authorized by the legislature to serve 20,160 at-risk children (about 28% of CO four-year-olds) • CPP is voluntary for school districts, 170 of 178 districts in Colorado as well as the Charter School Institute participate in the program. • Each “slot” is funded at .5 PPR in the School Finance Formula

4. CPP Enrollment over the Last Few Years † (48.0%) (42.7%) (39.2%) ‡ †Colorado State Demography Office

5. Estimate of Total Population Served by Colorado Preschool Program, Early Childhood Special Education and Head Start

6. Important Features of CPP: Locally appointed District Advisory Councils advise the school district in the implementation of the program. Including: • Recommending a plan for delivery of services • Monitoring programs at least twice a year using the Quality Standards • Coordinating family support services and extended day services • Overseeing the determination of eligibility

7. CPP’s Delivery System CPP Children are Served in 67.4% of the licensed preschools in the state. CPP Children are Served in 19.6% of the licensed child care centers in the state.

8. More Important Features of CPP: • Class size is limited to 16 children with a one to eight adult to child ratio. • Preschool offered 10 hours per week • Teachers must have core coursework in early childhood education, child development and family engagement. • CPP funds 90 hours per year for teacher planning, child assessment, training, and family support activities. • Family involvement and support are required • Child outcomes measured through Results Matter

9. Programs Serving CPP Children Must Use the Quality Standards • Interaction Among Staff and Children • Curriculum • Family/Staff Partnership • Staff Qualifications and Development • Administration • Staffing Patterns • Role and Function of the Teaching Team • Physical Environment • Health and Safety • Nutrition and Food Service • Evaluation

10. Relationship of Slot Allocations to Funding per “Slot”

11. Funding Sources Used to Provide Quality Comprehensive Education to Preschoolers • Early Childhood Special Education Funding • Parent Tuition • District General Fund • Head Start • Grants and Foundations • Child Care Assistance Program (CCAP) • School Readiness Grant • USDA Child and Adult Care Food Program • Title I • Community Contributions • Fundraising • Local Service Clubs

12. Benefits of CPP: • CPP children make faster progress in preschool than their more advantaged peers and the amount they are behind narrows before they enter kindergarten. • CPP children are more likely to be identified as “at or above grade level in literacy” in kindergarten through third grade than other at-risk children who did not attend CPP. • Across 3rd through 5th grade, in all three subject areas, more CPP children were proficient or advanced than other at-risk children who did not attend CPP. • In kindergarten through 3rd grade, CPP reduces the need for retention- in kindergarten by as much as one-half - thus saving taxpayer money. Colorado Preschool Program Working Together 2011 Legislative Report

13. Retention Rates Retention rate cut in half!

14. Two Ways Early Childhood Students Are Included in the School Finance Pupil Membership Count in Colorado

16. Colorado Preschool Program Funding

17. Trends in CPP Funding Over Last Three Years

18. The Fabric of Early Childhood EducationCharlotte Brantley - President and CEO, Clayton Early Learning

19. The Fabric of Early Childhood Education at the Community Level • CPP is one critical component • In many communities, other components include • Early Head Start (federal), • Head Start (federal), • the Child Care Assistance Program (federal + state), • local tax-funded programs (e.g., the Denver Preschool Program – DPP), and • tuition-based child care and preschool programs

20. Characteristics of Components • Some programs/funding streams target high need children, such as low-income and other risk factors, or specific age groups, such as 4 year olds • Some operate only in center-based settings, while others also fund family child care settings • Some require specific program quality indicators or performance standards • Some focus primarily on the child, while others have a more comprehensive family focus

21. The Fabric of Early Childhood Education from the Child’s Point of View • In the period from birth to kindergarten entry, an individual child might be enrolled in several of these components, often simultaneously • An estimated 240,000 + Colorado children in this age range have parents in the workforce • Families weave together these ECE components, many of which are part day, to form the whole day needed to support their children’s health, safety and school readiness while the parents are at work

22. The Fabric of Early Childhood Education from the Provider’s Point of View • Just as families weave these components, providers often weave them when policies allow • The resulting “blended” or “braided” funding streams create comprehensive programs that meet multiple needs of children and their families in one location • For example, embedding CPP within a community-based licensed child care program supports enhanced focus on early learning while eliminating the need to move children from site to site during the parent’s work day

23. The Economic and Social Underpinnings of the Early Childhood Education Fabric • The US approach to ECE has evolved over decades • The most compelling identified “need” for programs has differed from era to era • For example, during WWII, as women were encouraged to enter the workforce, the companion need for child care established a focus primarily on health and safety of children while parents worked • The 60’s political focus on the “Great Society” resulted in establishment of Head Start to address school readiness of poor children

24. The Economic and Social Underpinnings of the Early Childhood Education Fabric • In the late 70’s and 80’s states began to establish a year of readiness programming prior to kindergarten entry, most focusing on high need children • As more and more mothers entered the workforce in the past few decades, the number of child care programs grew exponentially • This pattern of program creation in response to one compelling need or another has resulted in the often fragmented “non-system of a system” we see today

25. The Funding Challenge • In large part, funding has not kept pace with the expansion of need and the expansion of programs • Not one of the multiple funding sources (federal, state, parent paid tuition) currently covers the real cost of early childhood education • In addition, many funding streams were designed to provide only a few hours of programming (e.g., 10 hours a week for CPP), not recognizing the family need for program hours that match the parent’s work schedule

26. The Starting Early Challenge • A growing body of research evidence supports the critical importance of starting a comprehensive early learning focus well before kindergarten entry, particularly for high need children • Results driven programs for infants and toddlers have proven outcomes, and are the most expensive to provide due primarily to the required staff to child ratios (ideally three teachers to 8 children)

27. The Starting Early Challenge School Readiness Scores (English Bracken) of Kindergarten Bound Children by Age of Entry into EducareAll Sites, Adjusted, 2007-09

28. The Starting Early Challenge from a Community ECE Fabric Perspective • Despite the compelling evidence of the previous slide, most programming for infants and toddlers is offered in community-based settings, and is paid for primarily by parents who are at the lowest earning levels of their adult life • In the most successful financing models, infant/toddler programming is combined with programming for preschoolers to leverage the dollars available

29. Early Childhood Education and School Finance SystemsJohn Augenblick – Partner, Augenblick, Palaich and Associates

30. The General Structure of School Finance Systems • Most states use some form of a “foundation” program to allocate the majority of state current operating aid – not capital aid – to school districts. • Under a foundation program, the state determines how much revenue school districts should have based on numbers of students, student characteristics, and district characteristics. • The state then “equalizes” aid by deducting local revenue from the total revenue districts should have.

31. How Students are Differentiated in State Aid Systems • Most foundation formulas are based on the “dollars times students” approach (e.g., $6,000 X 8,430 = $50,580,000). • In determining how much revenue districts should have from state and local sources, states may differentiate the value of students based on: • Grade level (e.g., .50 for K or cost weights for grade levels) • Program (e.g., vocational education) • Student characteristics such as: eligibility for free/reduced price lunch, gifted/talented, language needs, or participation in special education

32. It Is Possible to Add Preschool Students to the System • The state could count students who participate in preschool just like students in any other grade. • A variety of issues would arise: • How to count students • What cost (or relative cost weight) to apply to students • Whether funds would be categorical or fungible • Whether funds would be equalized • Whether there would be programmatic requirements

33. How to Count Students • What ages would be counted? (e.g., four years old, three and four year olds, younger participants, etc.) • Would all participants count or just some? (e.g., just those from low income families) • Would students be counted as full-time or part-time (that is as 1.0 or something less than 1.0 if attending on less than a full-time basis) • Would there be a cap on the number of students? Note: this age group may or may not be covered by state education clause language.

34. What Cost to Apply to Preschool Students • The same base cost as all other students • The actual cost of pre-school or a weight that is the ratio of that cost to the base cost • Differential cost based on program quality (e.g., higher quality programs have a higher weight) • Differential cost for three vs. four year old students (e.g., the cost differs between the two age groups) • Direct education cost only or include the cost of wrap-around services as well?

35. Other Considerations • Would some portion of state funding (e.g., 85%) be required to be spent on preschool programs or would funds be fungible like most other funding? • Usually, the cost of providing a service exceeds state aid • It is more difficult to require spending of state aid if it has been equalized so that districts receive different amounts of aid • Would private pre-school providers be eligible for state support? If so, how would wealth be taken into consideration? (e.g., districts count students served privately and pass through state, and local, support) • Could tuition be charged? What, if any, restrictions apply?

36. Programmatic Requirements • Should the quality of preschool programs be rated (e.g., Qualistar)? • Should standards be set for class size? • Should teachers have to meet certain credit or degree requirements? • Should teachers be paid on the same schedule as other teachers in the district?

37. Programmatic Requirements • Should there be standards for facilities? Should funds be provided for districts that do not have appropriate facilities? • Should a portion of “slots” be provided privately? • Should districts be required to have plans demonstrating how they will work with private providers?

38. Funding Illustrations • 13 states and DC include preschool in their state aid formulas. • Other states provide funding – but outside the formula. • States that do include preschool in their formulas do not require that districts actually provide preschool. • Funding may be insufficient to meet demand either due to the weight given preschool children or a cap on the numbers eligible to receive state aid. • Weights can conflate time and cost. That is .60 might mean students attending half time but cost weighted at 1.20 (50 X 1.20 = .60).

39. Funding Illustrations • Student counting examples: Vermont, .46; Kansas, .50; Iowa, .60; Oklahoma, .70 (1.3 for full-time); West Virginia, variable depending on hours per week (25 hours = 1.0, 12 hours = .5) • West Virginia requires that no less than 50% of the classrooms for eligible children must be provided through contractual agreements with community partners” that can meet state quality standards. • New Jersey has studied the cost of providing high quality preschool programs, which is higher than K-12 programs, but does not provide sufficient funding.