Signs of Decline

Since releasing The State of Preschool 2010: State Preschool Yearbook in April, we’ve been thinking a lot about the impact of the recession on our youngest learners. The 2009-2010 school year was the second year in a row that we saw the negative impacts of the recession, which became more severe and widespread. Total state funding for pre-K fell for the first time since NIEER has collected data, and state per-child spending was about $700 below its 2001-2002 level.

How badly has pre-K been impacted by this recession? According to the National Bureau of Economic Research, this recession started in December 2007, so we compared data from this most recent Yearbook against the 2006-2007 year, the last year before the recession impacted state revenue.

Per-Child Spending
From 2006-2007 to 2009-2010, real per-child spending is up 1.1 percent, which means an increase of only $44. Per-child spending was cut in 21 states, ranging from a cut of 2 percent in Florida to a whopping 95.6 percent reduction in Arizona. Ten states continue to spend no money on state-funded programs: Hawaii, Idaho, Indiana, Montana, New Hampshire, North Dakota, South Dakota, Utah, and Wyoming.

Enrollment
Enrollment has grown by 21 percent since 2006-2007. However, the recession has undoubtedly slowed enrollment growth. In 2006-2007, 4-year-old enrollment grew by 9 percent over the previous year, and in 2007-2008 by an even higher 10.9 percent. The growth rate declined to 7.5 percent in 2008-2009 and an anemic 3.8 percent in 2009-2010 school year. Three-year-olds fared even worse, with enrollment increasing only 12 percent between 2006-2007 and 2009-2010.

Since 2006-2007, 28 states have increased enrollment as a percentage of their 3- and 4-year-old population. Nationwide, there was a 2.6 percentage point increase in children enrolled. As shown by Table 1, there was great variation among the states. While most increases and decreases were mild, some states increased enrollment sharply. However, many of the states that increased enrollment did not increase total funding proportionately resulting in declining spending per child, creating concern for quality. Seven states reduced both total spending and the proportion of their population enrolled.

Unemployment and Income Changes
The recession’s impact can be traced fairly directly. States that experienced larger increases in unemployment rates tended to cut per-child spending. Nationally, the unemployment rate increased by 4.7 points from 2006 to 2009. Of 15 states with the largest increases in unemployment, 12 decreased their per-child spending on pre-K, while one state – Indiana – continued to provide no state funds for pre-K. The other two of these 15 states were North Carolina, which increased per-child spending by just 1.2 percent, and Rhode Island, which introduced a pilot pre-K program in 2009. At the other end of the spectrum, nine states increased per-child spending by at least 10 percent during the recession; none of these had increases in unemployment rates above the national average.

As we have shown above, the worst economic downturn since the Great Depression has negatively affected pre-K across the country and the impacts have tended to be greater where the recession hit hardest. Nevertheless, states have made remarkably different choices when faced with difficult decisions. West Virginia continued to steam ahead toward universal pre-K access while Arizona defunded its pre-K program entirely. This year continues to present governors and legislators with difficult choices in most states. We encourage all of them to carefully consider the impacts of decisions about pre-K on the lives of their youngest citizens, and to recognize that cutting quality may be worse than cutting enrollment as an educationally ineffective program offers little benefit to children or the taxpayers.

We have grave concerns that with less federal aid to weather the effects of the recession, state funding and thus growth in pre-K programs may continue to decline in the next few years even as parents return to work and seek preschool services for their children. Speaking to The Columbus Dispatch in Ohio, NIEER co-director Steve Barnett characterized cutting pre-K during the recession as a “double-whammy for the children,” further noting that, “We know that when a recession hits, when parents lose their jobs, when family income declines, that has a permanent negative impact on child development.” So children already hurting from the recession’s impacts on their families are doubly hurt when state-funded early learning programs are cut.

Finally, it does not seem to be widely recognized that the recession has increased the number of children eligible for most pre-K and other early learning programs. Most programs determine eligibility based on family income. As families have experienced salary cuts and layoffs, more children have qualified for programs. The optimal response is to increase funding for these programs, not to cut. Advocates and program administrators alike must be forceful in upcoming budget debates and as the economy slowly recovers to ensure programs are adequately funded to reach all children who need pre-K services. As Steve Barnett said upon the report’s release, “Overall, state cuts to preschool funding transformed the recession into a depression for many young children.” We must all do our part to remedy that situation.

– Megan Carolan, Policy Research Coordinator, NIEER
– Jen Fitzgerald, Public Information Officer, NIEER