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DIGGING DEEPER: WHAT THE YEARBOOK HAS TO SAY ABOUT FUNDING

(PART 3 OF 3-PART SERIES)

In our annual report of state-funded preschool programs, we examine three key features of each state pre-K initiative: access, quality standards, and resources. Here we provide a big picture look at the last of these features, resources, in an effort to analyze the nation’s commitment to financing prekindergarten at the state level. (See our previous posts in this series for analyses of access and quality standards.)

In The State of Preschool 2010: State Preschool Yearbook, we found that in the 2009-2010 school year, states spent more than $5 billion on state pre-K.*  This represents an inflation-adjusted decrease of almost $30 million or 0.6 percent from the previous year, when this spending had a 10 percent nominal increase the previous year. The decrease in real state spending on pre-K is unprecedented and confirms the negative affect of the recession on pre-K many anticipated.

Furthermore, state funding per child for pre-K decreased by $114 for the 2009-2010 school year.  This downward slide, coupled with the more modest decline of the pervious year, indicates the dangerous impact of the recession on state-funded pre-K. And, without the aid of American Recovery and Reinvestment Act (ARRA) funds, per-child spending nationwide would actually have decreased by $148 to less than $4,000 per child, a low not seen since the 2007-2008 school year.  While stimulus funds taper off, pre-K funding may be further jeopardized in the next years as states continue to reel from budget crunches.

However, state funding is not the only source of funds for state pre-K programs as states may choose to direct local and federal funds toward state-funded preschool education initiatives. Lack of information about local and locally allocated federal funds makes it difficult to determine how much is actually spent on prekindergarten in each state. While not all state preschool programs are explicitly designed to rely on combined state, federal, and local funding as is the case with K-12, it is still common to do so. Although we continue to improve our ability to estimate funds from federal and local sources, these data remain incomplete, making it difficult to make good cross-year comparisons on total funding per child. Nationwide, per-child spending from all reported sources was $4,653 though this figure surely underestimates the true national figure if all spending could be identified.

Other key findings regarding funding include:

•  State spending per child nationwide was $4,028, an inflation-adjusted decrease of $114 per child.

•  States differ greatly in per-child spending.  New Jersey, Connecticut, Alaska and Oregon spent more than twice the national average of per-child spending. On the other end of the spectrum, Arizona spent only $115 per child. Nebraska, South Carolina and Maine spent less than $2,000 per child. Colorado, Kansas, Florida and Nevada spent less than $3,000 per child.

•  Adding up all reported public funding for state-funded prekindergarten (federal, state, and local), the total exceeded $5.7 billion dollars, an increase of $55 million or just one percent over the prior year (inflation-adjusted).

•  We continue to get more accurate information on funding from other sources, making a large difference in total funding for some states. Based on reported spending, nine states used local and/or federal sources to fund at least one-third of their program.  Additionally, over half of the funding for pre-K in Maryland, Kentucky, and South Carolina came from these non-state sources.

•  Per-child spending from state, local, and locally allocated federal funds was $4,653 for the nation. This is an inflation-adjusted decrease of $58 from the previous year.  If the increase of only $32 per child in the previous year was a sober indicator of the recession’s potential impact, this year’s decrease confirms the fears that state pre-K could be battered by the downturn.

•  We can only confirm 17 states spent enough to deliver a program that met all 10 NIEER benchmarks.  Some others may, but even allowing for incomplete reporting on spending, a substantial number of states are unlikely to provide funding adequate to sustain an educationally effective pre-K program. (See Table 7 of The State of Preschool 2010 for details).

•  More than 60 percent of all 3- and 4-year-olds in state-funded pre-K nationwide were served in six states—California, Florida, Georgia, Illinois, New York, and Texas—none of which report enough per-child funding from all sources to adequately fund a high-quality preschool education program.

•  Some states used funds from the American Reinvestment and Recovery Act (ARRA) to replace lost state funds for pre-K.  Without these reported funds, state spending per child would have fallen even further to $3,994 while all source spending would be $4,619.

The Yearbook also includes an analysis of which states adequately funded their preschool education initiatives to meet the NIEER quality standards benchmarks. This year, we could identify with confidence only 17 states as providing sufficient funding to meet all 10 benchmarks. While states might have adequately funded programs, we did not have sufficient information on other sources of funding to make that determination.  Seven of the states that we could not clearly identify as adequately funded met eight or more of NIEER’s benchmarks, including Alabama which met all 10 NIEER benchmarks.

In sum, two consecutive decreases in inflation-adjusted state spending per child enrolled is taking its toll on pre-K programs.  State per-child spending is almost $700 below its 2001-2002 level. Since the 2001-2002 school year, eleven states have decreased nominal per-child spending, and a total of 25 states have failed to keep up with inflation. Looking ahead, many states are struggling to make ends meet and pre-K is all too often sacrificed in the attempt to balance budgets.  Researchers and economists agree that high-quality early childhood education more than pays for itself in academic and social benefits.  Scrimping on quality programs for young learners may help close budget gaps now but, in the long-term, it is a “penny wise, pound foolish” approach to future prosperity.

– Megan Carolan, Policy Research Coordinator, NIEER

– Jen Fitzgerald, Public Information Officer, NIEER

*Note: A policy change in California resulted in a large increase in enrollment and funding reported for preschool by that state.  In prior years, California funded child care with similar goals and standards to preschool, but with periodic redetermination of eligibility based on parental work status and income that failed to ensure children obtained at least one school year of service.  This policy was changed and these programs merged with preschool.  The increase in children and funding for California over last year thus reflects a positive policy change, but not a net increase in enrollment or spending across all early childhood programs. The increase in California’s spending and enrollment is thus not counted in national figures.