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Report for Early Learning Council Presentation to WERA

December 5, 2008

Access to High Quality Early Learning for Access to High Quality Early Learning for Washington’s Young ChildrenWashington’s Young Children

“Forging a Brighter Future for Children and Families”AT THE EVANS SCHOOL OF PUBLIC AFFAIRS | UNIVERSITY OF WASHINGTON

Richard N. Brandon, Ph.D.Human Services Policy Center

University of Washington

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OutlineOutline

• Purpose of Study

• Guiding Principles

• Policy Specifications from ELC

• Financial Analysis of Policies Specified

Full study: www.HSPC.org

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Purpose of StudyPurpose of Study

Assist the ELC to consider alternative policies that provide all young children in Washington access to high quality early learning

Simulation process; guidance from research

Analyze costs, impact on family affordability, and targeting of funds, for alternative policy packages

Design and implementation issues will remain

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Guiding PrinciplesGuiding Principles1. High quality early learning (B-5) -- essential to

children’s healthy development and school success

2. A market-based approach– financial access and choice for families with incentives and requirements for quality

3. All settings, including parents, FFN’s

4. Specialized professional training and education

5. Adequate compensation

6. Cost-effective solutions

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28%

26%17%

29%Center/Head Start

Pd Non-Rel (FCC)

FFN-Unpaid

FFN-Paid 59%14%

11%

16%Center / Head Start

Pd Non-Rel (FCC)

FFN-Paid

FFN-Unpaid

Percent Total Non-Parental Hours,

US NHES - 1999

Children B-2

Children 3-5

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ELC Specifies Criteria for:

Each QRIS Level

&

Family Affordability

Quality-based rates determined for providers; reflect actual cost of each QRIS level

(various payment mechanisms possible)

Eligibility determined by affordability criteria & work/training requirements

Total Assistance Cost

Sum of Quality- based payments for eligible children

Varies by quality, salary & eligibility specifications

Distributed by age, income, setting

The Relationship Among QRIS, The Relationship Among QRIS, Reimbursements Based on Quality, & Reimbursements Based on Quality, &

Financial AccessFinancial Access

Payments made for children/families based on income, cost-quality of setting

(scholarships)

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Comprehensive Approach: A Funding Package to Comprehensive Approach: A Funding Package to Implement Many ELC RecommendationsImplement Many ELC Recommendations

• Parenting information & support

• QRIS: costs to implement & help providers improve early learning services

• Financing that links funding levels to program quality (tiered reimbursement)

• Professional development & compensation

• Affordability: populations to be served

• Continuity of care for children

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Scope of SpecificationsScope of Specifications

• Quality

• Financial Access

• Scope of Services

• Governance and Implementation

• Phase-In Approach

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Quality SpecificationsQuality Specifications

• Moderate salary schedule –

BA at annualized elementary teacher; AA, HS lower; MA higher

• Professional Development: paid release time; allotments for higher ed tuition or community-based training, plus expenses.

• Ratios at each QRIS level, for each age group: Infants 1:4, toddlers 1:5/7; preschoolers 1:9/10)

• Staff Mix: Percent college degrees increases with QRIS level

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Financial Access SpecificationsFinancial Access Specifications• Eligibility:

– Work/school/training requirement for all families;

– Expanded eligibility for families in work/school transition

• Affordability:

– H.Q. costs ~25% average net income if no assistance

– Family portion of child care costs increases as income increases

– Families pay no more or less than current payments

– Income cut-off for assistance: Just over 3x Federal Poverty Line (~$62,000 for family of four)

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Scope of ServicesScope of Services

• FFN Support – Infrastructure, resources and information, play &

learn, facilitated workshops, evaluation

• Parent Support

– Needs assessment and evaluation, infrastructure, home-visiting, parent education

• ECEAP Child Care Partnerships– Provide access regardless of work requirement– Expand to B-3

Hourly Costs to Providers of Meeting Quality Standards - Centers

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• Infant costs lower due to low ratios; not assume cross-subsidies

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Moderate salary option yields costs close to 50th percentile prices (+5%)

33% higher than current state reimbursement rate

$3.24

$3.66

$4.20$3.84

$5.11

DEL Reimbursement Rate

50th Percentile Price 2006

75th Percentile Price 2006

High Quality -Moderate

Compensation

High Quality - Higher Compensation

Hourly Costs of High Quality Center-Based ECE in Perspective

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Quality promotion, regulation and professional development = 8%

Hourly cost components vary slightly by age group and between moderate and higher cost options.

Hourly Cost Components for Center Care, Moderate Cost Option, Toddlers

Salaries51%

Benefits9%

Professional Development

3%

Non-Personnel24%

Regulation4%

Quality Promotion and Support

1%

Reserves8%

15 HQ equal 50th percentile if moderate compensation; 75th if higher

FCC Hourly Costs in Perspective (At 50 hrs/wk)

$2.96$3.17

$3.64

$2.98

$3.89

DEL ReimbursementRate

50th PercentilePrice 2006

75th PercentilePrice 2006

High Quality -Moderate

Compensation

High Quality - HigherCompensation

FCC vs. Center Hourly CostsWeighted Average of Ages

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3.433.65

3.95

2.933.04 3.12

QRIS Level 1 QRIS Level 3 QRIS Level 5

Center-based Family Child Care

FCC 75-80% of Center costs; currently 87%

Affordability to Families

• Market effects, tenable price required

• Criterion – 10-15% Net income ~ current price

• Findings => partial assistance required for middle income families

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

QRIS Level 1 QRIS Level 3 QRIS Level 5

QRIS Level 1 75% 27% 17% 14% 11%

QRIS Level 3 80% 29% 18% 15% 12%

QRIS Level 5 86% 31% 19% 17% 13%

< 1 FPL 1- 2 FPL 2- 3 FPL 3- 4 FPL 4 - 5 FPL

Affordability: Cost of ECE as Percent Net Family Income

2124

Co-Payment Curves: Alternative Maximum Eligibility

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%0

4,60

0

9,20

0

13,8

00

18,4

00

23,0

00

27,6

00

32,2

00

36,8

00

41,4

00

46,0

00

50,6

00

55,2

00

59,8

00

64,4

00

69,0

00

73,6

00

Household income

Per

cent

age

of E

CE C

ost P

aid

by S

ubsi

dy

$18,400

$34,000

Eligibility Increases Targeted to Moderate-Middle Income

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Phase-In ApproachPhase-In Approach

• Phase-In approach for QRIS, Family Support and FFN

– 15% of state in 2007-2008

– 25% of state in 2008-2009

• Raise floor of current subsidies to 50th percentile market rate for remainder of state

• Invest in statewide infrastructure

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Increased State Costs for Access Increased State Costs for Access Study OptionStudy Option

Cost Category

Statewide

(2006 Millions)

Inflation-Adjusted

Phase-in Cost 2007–08 (15% of Children)

Inflation-Adjusted Phase-in Cost 2008–09 (15+10=25% of

Children)

Biennium Costs

Early Learning Including: FFN Support; Governance & Implementation; Administration of Benefits

308 46 76 122

Parent Support and Education

w/ Statewide Infrastructure 40 6 10 16

ECEAP/CC Partnerships 46 7 12 19

Raise child care subsidy reimbursement rates to 50th percentile for remainder of state

N/A (13) (11) (25)

TOTAL 394 59 99 158

Conclusions: ELC Preferred Option would provide access to high

quality ECE for all children at modest cost, relative to public education spending in Washington

QRIS/TR would provide accountability, incentives

Providers would need stable funding source to make significant chances in staff qualifications, compensation

Middle income families would require partial assistance to afford high quality ECE - otherwise market would collapse

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Extra SlidesExtra Slides

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Full Study Available online:

www.hspc.org

http://hspc.org/publications/pdf/ELC_report_FINAL.pdf

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Example of Income-Related ScholarshipExample of Income-Related Scholarship• QRIS Level 3 - Moderate Compensation; for higher compensation,

scholarship would increase, family payment would not increase.• Toddler at a Center• Hourly cost = $4.04; Monthly Cost (40 hrs/wk) = $695

Family IncomeFamily Income

Family Payment Family Payment

((Monthly, Per Monthly, Per ChildChild))

ScholarshipScholarship

Low < 1 FPL ($0-20K) (1% Net Inc.)

$8 $687

Moderate = 1-2 FPL ($20-40K) (3% Net Inc.)

$63 $632

Middle = 2-3 FPL ($40-60K) (8% Net Inc.)

$272 $423

Upper-Middle = 3-3.2 FPL ($60-62K) (14% Net Inc.)

$535 $160

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Example of Affordability for Family Child Care HomeExample of Affordability for Family Child Care Home

• QRIS Level 3 - Moderate Compensation; for higher compensation, scholarship would increase, family payment would not increase.

• Hourly cost = $3.47; Monthly Cost (40 hrs/wk) = $597

Family IncomeFamily Income

Family Payment Family Payment

((Monthly, Per Monthly, Per ChildChild))

ScholarshipScholarship

Low < 1 FPL ($0-20K) (1% Net Inc.)

$8 $589

Moderate = 1-2 FPL ($20-40K) (3% Net Inc.)

$63 $534

Middle = 2-3 FPL ($40-60K) (8% Net Inc.)

$272 $325

Upper-Middle = 3-3.2 FPL ($60-62K) (14% Net Inc.)

$535 $62

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Governance & ImplementationGovernance & Implementation

• State infrastructure (statewide)

– State advisory group, CCR&R, MIS

• QRIS implementation costs (phase-in)

– QRIS grants, accreditation fees, external assessment, training infrastructure

• Evaluation and Baseline Assessment of Child Care Quality and School Readiness (phase-in)

• Costs of administering benefits