Financing Early Education
Preschool Policy Briefing
June 22, 2004
W. Steven Barnett, Ph.D.
National Institute for Early Education Research
Copies and details available from: www.nieer.org
(732) 932-4350, sbarnett@nieer.org
Presentation Overview
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Why does early education financing matter?
Access is incomplete and unequal
Quality is too low
Families struggle with the cost
Voters want government to step in
America can afford a better policy
Total cost is low
Public and private sectors can share costs
The cost of missed opportunities is higher
America Faces Serious Challenges
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Sustaining economic growth
Increasing productivity and competitiveness
Increasing educational achievement
Meeting future public commitments
--Social Sec., Medicare & Medicaid 75% of 2040 budget
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Ensuring a better future for America’s children
Early Education can be
part of the Solution
Increases Educational Success and Adult Productivity
 Cognitive abilities, achievement, & school success
 Social behavior
 Employment, earnings, and tax revenue
Decreases Costs of Government
 Schooling (special ed. & grade retent.)
 Social services
 Crime
 Health care
Cognitive Readiness Gap
Abilities of Entering Kindergarteners by Family Income
Abilities
Scores
60.0
55.0
Reading
School Readiness Gap
Math
50.0
General
Knowledge
45.0
40.0
Low est 20%
2nd Low est
20%
Middle 20%
2nd Highest
20%
Highest 20%
Fam ily
Incom e
Social Readiness Gap
Social
Scores
Social Skills of Entering Kindergarteners by
Family Income
9.80
9.60
9.40
School Readiness Gap
9.20
9.00
Social
Skills
8.80
8.60
8.40
Family
Income
8.20
8.00
Lowest 20%
2nd Lowest 20%
Middle 20%
2nd Highest 20%
Top 20%
Costs of Early Education
The Cost of Early Education Depends on the Design
 Ages served
 Hours of the program
 Quality—teacher qualifications, class size, etc.
 Targeted or universal
 Systems costs--start up and infrastructure
What are benchmarks for cost?
 Per pupil costs of K-12 education: $8,733
 Per pupil costs of Head Start: $6,934
 Per pupil state expenditure on PreK: $3,455*
* Does not include local share of costs.
Early Education Finance in
Perspective (FY 2005 Budgets)
American economy, annual GDP
Federal annual spending
State and local annual spending
Social Security and Medicare
Agri-business subsidies
Head Start
State Pre-K
UPK
= $12.0 trillion
= 2.4 trillion
= 1.2 trillion
=
800 billion
= 15-20 billion
=
6.9 billion
=
2.5 billion
= $10-30 billion
Revenue Sources
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New taxes and gaming revenue
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Borrowing (deficits, bonds for tax cuts, facilities)
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Obtain more existing education funds (Title I)
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Displace other noneducation spending (economic devel.)
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Tax breaks
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Parent fees (sliding scale, core v. care)
Conclusions
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Access and quality problems require public
finance
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Quality pre-K for all is good national policy
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We need a solution for everyone
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The cost is modest
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Options include tax increases, tax cuts, borrowing,
spending shifts, and parent fees