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Policy Analysis

Funding Landscape for Preschool with a Highly Qualified Workforce

December 5, 2016
Economics and FinanceWorkforce
W. Steven Barnett, Ph.D. and Richard Kasmin

The purpose of this paper is to consider the potential implications of funding state pre-K programs through some version of the school funding formulas used in K-12 with particular attention to how this might facilitate more adequate compensation for a highly qualified workforce.

State pre-K often receives less funding per child, even prorated for length of day, than does K-12 though it is difficult to assess this precisely because of a lack of good information about all funding sources for state pre-K (Barnett, Friedman-Krauss, Gomez, Horowitz, Weisenfeld, & Squires, 2016). This funding constraint is likely one reason that 20 states do not require all state pre-K teachers to have a four-year-college degree and 8 do not require specialized training in early childhood as called for by a recent report from the Institute of Medicine and National Research Council (Barnett, et al., 2016; Allen & Kelly, 2015). State pre-K teacher salaries tend to be substantially less than those of their elementary school counterparts where data are available for comparison (Barnett et al., 2016).

The main finding of our report is that use of the school funding formula is associated with greater adequacy and stability in funding, which argues for its wider use in pre-K financing. Higher adequacy in general is likely to translate into higher teacher salaries as most states have policies setting reasonable limits on class size and ratio and the workforce accounts for most of the cost (Barnett et al., 2016). We also have compiled a list of 10 state
pre-K programs that already are funded as part of the state K-12 funding system, and these programs tend to have higher levels of adequacy and effort than do other programs.

However, it is also the case that state school funding formulas used to calculate funding for their respective public K-12 systems vary meaningfully, resulting in a wide distribution of results regarding adequacy, equity, and effort in funding. These factors must be kept in mind when advocating for using school financing formulas to fund pre-K.