What’s In the Proposed Fiscal Year 2020 Budget for Early Childhood Development?

Summary:

• $5 million increase for DC’s child care subsidy program for children in low-income families, the third consecutive year of increases 
• Funding increase is just ¼ of what’s needed in FY 2020 to support the multi-year plan to create universal high-quality care under the 2018 “Birth-to-Three for All DC” Act
• No funds to implement other parts of the Birth-to-Three Act intended to develop comprehensive supports for pregnant women and families with infants and toddlers
• $2.5 million to make permanent a $1,000 child care tax credit adopted in FY 2019 on a one-time basis. The credit is not well targeted and unlikely to improve access to high-quality child care.

The proposed fiscal year (FY) 2020 budget makes only modest new investments to support early childhood development for infants and toddlers. The budget includes an increase in funding for DC’s child care subsidy program for low-income children, building on increases in recent years, but still leaves funding well below what’s needed to support high-quality care.

Beyond that increase, the proposed budget provides no other resources to implement the Birth-to-Three for All DC Act, adopted last year, which laid out a multi-year plan to provide comprehensive supports from pregnancy to age three.[1] For example, the budget includes no funds to expand home visiting or to enhance the role of pediatricians to connect vulnerable families to services.

The budget would make permanent a $1,000 tax credit for child care expenses that was included on a one-time basis in the FY 2019 budget. This tax credit is not well-targeted—it is available to families with incomes up to $750,000—and the amount is likely to be too small to enable families to obtain better quality care.

Why Early Childhood Investments Are Important

The period from birth to age three is critical for social, emotional and cognitive development—it’s the foundation on which all future learning rests. Over this time, babies’ brains grow to 85 percent of their adult size, creating more than a million neurons every second.[2] This time of growth is unmatched during any other period in life.

Good health care, strong family supports, and affordable quality early learning environments are instrumental to the well-being of young children. Yet too many children in families with low incomes and children of color face barriers to academic achievement beginning at birth. Research shows that children in low-income families “often receive early care of such poor quality that it diminishes their potential” but that investments to improve the quality of care they receive has “positive effects that can endure into the early adult years.”[3]

DC’s “Birth-to-Three for All DC” legislation (Birth-to-Three) is intended to strengthen and expand services and provide comprehensive supports to pregnant women and families with young children. The goals of the legislation are to improve school readiness, improve the quality of early education, offer competitive compensation for early educators, make child care more affordable to all DC families, expand home visiting, and strengthen social-emotional health and coordinated medical services for young children and families. The Birth-to-Three legislation needs additional funding over several years to phase in its provisions and make this vision a reality.

Proposed Budget Doesn’t Put Child Care Program on a Path to Funding High-Quality Care

The proposed DC budget includes $5 million to improve DC’s child care subsidy program for children in low-income families, building on increases in FY 2018 and FY 2019 (Figure 1). Yet the new increase is less than one-fourth of the $22 million increase needed in FY 2020, and less than 5 percent of the $114 million needed over the next four years (Figure 2).

Access to high-quality, affordable early learning can reduce the difference in school readiness between low-income toddlers and their higher-income peers. Children who receive quality care also grow up to earn more money as adults.[4]

The District supports the education of 5,100 infants and toddlers in families with low- or moderate-incomes through the Child Care Subsidy/Voucher program, administered by the Office of the State Superintendent of Education (OSSE).[5] Families receive vouchers that they can use at licensed providers.

Yet the payments to early education providers are not enough to cover the costs of high-quality early care and education.[6] This leaves many providers struggling to make ends meet and contributes to a shortage of high-quality care. It also leaves compensation for teachers and staff at very low levels—an average of $29,000—making it hard to attract and retain an experienced workforce.

This is particularly a problem for providers in low-income neighborhoods that primarily serve children who are in the subsidy program. Nearly all licensed infant and toddler slots in Wards 7 and 8 are used by children receiving subsidies, and over half of the children in licensed child care in Wards 1, 4, and 5 are receiving subsidies.[7]

The Birth-to-Three Act calls for raising child care subsidies by 2023 to cover the full cost of care and to raise compensation of early educators to align with salaries of public school teachers.

Tax Credit for Child Care Is Not the Best Mechanism to Improve Affordability

The budget makes permanent a $1,000 tax credit for child care expenses that was included in the FY 2019 budget on a one-time basis. The tax credit covers children up to three years old attending a licensed facility, at a cost of $2.5 million per year.[8]

While many families struggle to manage the steep costs of early care in DC—an average annual cost of $23,000 for center-based early care in 2017—the child care tax credit is not an ideal response. At a maximum of $1,000, it offsets only a small portion of costs and thus is unlikely to affect access to quality care. With a maximum income eligibility of $750,000, it is not targeted to families who need it the most.

The Birth-to-Three Act includes more meaningful and targeted assistance, by ensuring that families spend no more than 10 percent of their income on early care. If funded, this provision is scheduled to be implemented after the investments in the child care subsidy program for low-income children are completed.

No New Local Dollars for Home Visiting Programs to Support Families with Young Children

The budget provides no funds to expand DC’s local investment in home visiting programs, which also are supported with $1.5 million in federal grant funds through the Maternal, Infant, and Early Childhood Home Visiting program (MIECHV).

Home visiting programs support families of young children as they transition from pregnancy to parenting. Many pregnant women and young families need help understanding and supporting their child’s development and may not know how to find the resources they need to care for themselves and their children—home visiting programs can serve as a bridge to these critical resources. Currently, Department of Health home visiting programs primarily target families of children from birth to age three in Wards 5, 7, and 8 and homeless families.

Existing home visiting services do not reach all of the families who could most benefit from them, and the District’s local investment in home visiting is too low to adequately support the programs and their workforce.[9]

The Birth-to-Three Act calls for a $2 million increase for general home visiting programs–$710,000 toward this goal was funded in FY 2019—and an $11 million increase for immigrant families and families experiencing homelessness through the Early Start program. The FY 2020 budget actually reduces DC’s local investment in general home visiting programs by $100,000 and adds no new funds to implement the specialized programs.

Budget Doesn’t Fund Health Supports and Other Elements of Birth-to-Three Act

The Birth-to-Three Act includes several other provisions to advance healthy child development that were not included in the proposed budget.

Healthy Futures

Under this program, licensed professionals provide on-site mental health consultation to early childhood educators to build teachers’ capacity to reduce challenging behaviors, promote positive social emotional development, and support families. The Birth-to-Three Act calls for a $1.7 million increase in this cost-effective model.

HealthySteps

This evidence-based pediatric primary care program ensures the healthy development of babies and toddlers by addressing common concerns that physicians often lack time to address. This includes feeding, behavior, sleep, attachment, parental depression, and care coordination. An increase of $300,000 would allow HealthySteps to expand to a second clinic.

Help Me Grow

The Birth-to-Three Act calls for expanding this phone-based care coordination system to help families navigate the District’s support services and maintain centralized records of developmental screenings and data. The FY 2020 cost would be $1 million.

Lactation Certification Preparatory Program

The Birth-to-Three Act calls for new services to provide instruction, assistance, and mentorship to individuals pursuing a career in lactation consulting. The FY 2020 cost would be $100,000.