Falling Behind

Editor’s Note: This is the third in a series of stories Business NH Magazine has published in the past year (March and September 2014) examining early childhood education as a workforce issue. For links to the first two stories, visit tinyurl.com/k3x7w4k.

The buzz around universal preschool and the role of early childhood education to the future workforce pipeline has never been louder. The White House has made universal preschool and improving the quality of child care programs a priority. And federal funds aimed at furthering early learning initiatives—Race to the Top: Early Learning Challenge grant and the Preschool Development Grants Program—have poured millions into all but one of the New England states in the past two years.

Yes, that would be NH.

All told the federal government doled out $177.5 million to the five other New England states to help them improve access to and quality of early childhood education. New Hampshire received nothing because, says Jackie Cowell, executive director of Early Learning NH, it is not investing in its own.

Four years ago, state budget cuts to the NH Department of Health and Human Services resulted in $8 million being dropped from funds used to provide child care tuition assistance to families and financial incentives to early childhood learning centers to improve the quality of their programs. That portion of the budget dropped 22 percent from $36 million to $28 million.

“Other states spend more on Head Start and invest more in early supports and services,” says Laura Milliken, director of Spark NH, an early childhood advisory council. “In New Hampshire, [Headstart] is largely funded by federal dollars, and in other states it is supplemented by state money.”

Cowell says the cut cost the state the Race to the Top grant in 2013 (NH had requested $37.5 million over four years), and the state’s failure to restore that level in the last biennium budget cost NH the Preschool Development grant.

This is a huge problem for the 42,000 children, or 6 percent of the state’s children, who lived in poverty in 2012, according to the Annie E. Casey foundation report in 2014. The foundation also found that 13,000 children in NH did not attend preschool. While there are 950 licensed child care programs in NH, only 120 have acquired the license-plus designation, and 57 have national accreditation. The state has experienced a 22 percent decline in the number of licensed programs during the last 13 years—a loss of 271 programs.

Both of those higher designations come with stringent quality standards and open the centers to scholarships for children from low-income families. Average weekly tuition at these designated quality programs is between $173 and $215 depending on age, a number that challenges even middle class families.

Funding Quality

New Hampshire is a very frugal state. We fund state parks with user fees, a funding level that barely maintains them. We rank at the bottom of the barrel for funding public higher education. And it has not prioritized helping infants and toddlers whose parents lack the financial means to give them a solid foundation. It becomes a classic case of the haves and have-nots. Those with means pay top dollar for the best daycare while those without must find care they can afford.

Spark NH and its partners have been making presentations to Rotary Clubs, the Business and Industry Association, Leadership NH and Leadership Seacoast about research that demonstrates investing in the development of children between birth and five—one of the most critical periods for brain development—sets children up to succeed in school and leads to higher graduation rates, college entrance rates and better jobs.

“Participation in high-quality early learning programs—like Head Start, public and private pre-K, and child care—will provide children from all backgrounds with a strong start and a foundation for school success … Numerous economic studies have documented a rate of return of $7 or more on each dollar invested through a reduced need for social service spending, as well as increased productivity and earnings for these children as adults,” says Steve Rowe, president of the Endowment for Health, NH’s largest health foundation.

The NH Department of Health and Human Services is working with other state officials and other stakeholders to develop a plan for a comprehensive statewide quality rating and improvement program for early childhood learning centers and for a new website that would provide information to parents about center quality, both things the two major federal grants would have supported. Those grants also would have increased stipends for families in need and stipends to centers to improve the quality of their programs. Those efforts have stalled due to lack of funding.

Ellen Wheatley, administrator of the Child Development Bureau at the Division for Children, Youth and Families at the NH Department of Health and Human Services, explains the current rating system in NH has only three levels, and incentives are not sufficient to compel more centers to seek accreditation. Those levels are licensed, licensed-plus (which has more stringent quality standards), and national accreditation (which sets the most ardent quality standards for the industry).

Wheatley says the state provides scholarships to early learning centers for children in families with income below a certain threshold. While licensed-plus and nationally accredited facilities receive a 5 to 10 percent increase in scholarships provided by the state over scholarships to other centers, that bump often does not cover the costs incurred by centers to meet the increased quality standards, as well as the additional paperwork required.

As such, there are many privately-owned facilities that do not accept families who cannot afford the full fees. Most of the licensed-plus programs in the state are nonprofits with a mission to serve families of all economic levels, but even with scholarships, some remain unaffordable for those who can’t pay the difference between the scholarship and the fees, Cowell says. “The vast majority of children eligible for scholarship are not in accredited programs,” Cowell says.

In order to become licensed-plus, a center must meet several quality requirements, including completing annual performance evaluations for all staff, having personnel policies in place, having a written curriculum, providing parents with written materials about the program, and welcoming children and families of all abilities and making accommodations for children with special needs.

National accreditation through the National Association for the Education of Young Children has more stringent standards to meet, including having a percentage of teachers with bachelor’s degrees, having developmentally appropriate environments for the children served and having strong supports in place for families, Cowell says. “Quality costs money. The difference between licensed plus and national accreditation are very far apart,” Cowell says.

Aside from scholarships, the only other major incentive for centers to strive for licensed-plus or national accreditation is to better market the high quality of their programs to families. The state’s application for Race to the Top Funds would have increased financial incentives for centers to seek quality accreditations without tying them solely to the income eligibility of families, she says. Those scholarships are an important source of income for many centers. About three of every five licensed-plus or higher programs (62 percent) have an arrangement with NH Department of Health and Human Services to receive scholarships for eligible enrolled children.

Wheatley says the state’s rating system should have at least two more levels to allow programs to build up to national accreditation. She says providing at least a 15 percent increase in scholarships would be a more compelling financial incentive for programs to do so. “They could start building that into their salary base for teachers so they could get more highly qualified teachers and retain them,” Wheatley says.

Two of the five Head Start grantees in NH—Southern NH Services and Community Action Partnership of Strafford County—recently received federal funds to expand programming for infants and toddlers through the federal Early Head Start Child Care Partnership grants, Cowell says, noting NH relies solely on federal funds to support Head Start programs. Southern NH Services will be able to serve 16 additional children through the grant. Those two grantees operate a total of 43 sites.

“A small number of children eligible for Head Start actually participate. We don’t have the capacity. The state does not fund it,” Milliken says, adding many Head Start programs have waiting lists. The length of the waiting lists is constantly changing.

Tough Economics

The cuts to state funding only compound the financial challenges facing early childhood education centers, especially accredited programs as many of those are nonprofits. Several directors of these nonprofit centers cite low wages as a big hurdle to attracting and retaining quality teachers and staff.

The median hourly wage of center-based early childhood teachers working with children from infant to preschool nationally was $10.60 per hour in 2012, according to the National Survey of Early Care and Education. In 2013, the mean hourly wage of childcare workers in NH was $10.52, and $13.27 for preschool teachers. (See chart for details). Cowell says to be competitive for educators with teaching degrees, early child care centers need to at least offer wages that are competitive with those offered in public K-12 schools. In NH, the median hourly wage for kindergarten teachers is $21.95.

“The dilemma we face is we have no way to pay people more unless we charge families more, and families can barely afford to pay what they pay,” says Cellissa Hoyt, executive director of Growing Places, which has locations in Durham, Lee and Madbury. Weekly fees for Growing Places range from $300 for an infant to $240 for pre-school, Hoyt says.

“Some families are paying as much as their mortgage for childcare or more depending on where they live. The thing that’s so sad is that’s supporting an arcane early childhood system that barely pays a livable wage and is so strained,” she says.

Growing Places, a licensed-plus facility, is among those with higher rates of pay as well as a generous benefits plan that pays 100 percent of health and dental insurance premiums. Teachers at Growing Places start at about $24,000, and staff with longevity earn in the mid-$30,000 range, Hoyt says. “That’s not great, but it is for the field,” she says, adding most of her staff have a bachelor’s degree and some a master’s degree. “And that’s their earning potential. It’s challenging. They do it because they love the work,” Hoyt says.

Thanks to strong enrollment, she was able to offer a 40 percent tuition reduction to the 5 percent of families attending with a state subsidy as of 2015. “It’s very rewarding to know we can make that difference,” she says.

Also among the schools investing in personnel as part of its efforts to improve quality is Seacoast Community School, accredited by the National Association for the Education of Young Children since 2008. The center spends about 87 percent of its $1.9 million annual budget on its 50 employees, says Deborah Stokel, co-executive director and director of early childhood programming at Seacoast Community School in Portsmouth, the third largest licensed early learning center in NH with more than 300 children enrolled. Entry-level salary at Seacoast Community School for teachers is $11 plus benefits and increases depending on the candidate’s level of education. “Our top teacher probably is around $16 to $17 an hour,” Stokel says.

It’s little wonder that a 2014 state survey on NH’s Early Care and Education Market Rate found 39 percent of teaching staff in NH’s early childhood education centers had no degree. It also reported the mean weekly rate for full-time programs in the state ranged between $173 and $215 depending on the age of the child. “Parents can’t afford to pay, teacher can’t afford to stay. There’s got to be a better way,” Cowell says. “My dream is to have public and private investment with businesses matching funds with state and federal government dollars to close the gap of what it costs to reach quality versus what can be raised from families.”

Nonprofits Step Up

Nonprofits have been stepping up with resources, funding and tools to improve quality and access to early childhood programs to fill the gap left by the state and the private sector. Among the regions leading the way in coordinating and funding early childhood efforts is the North Country, thanks to millions in investment from the Neil and Louise Tillotson Fund of the NH Charitable Foundation. Since 2009, the fund has targeted nearly $10 million in investment into two areas determined to have the most potential in transforming the region’s flagging economy: early childhood development (ages 0 to 6) and entrepreneurship and business development in Coos County.

The Endowment for Health has also made early childhood one of its top five stated priorities for research and funding, and in September awarded $80,000 to Health Strategies of NH to fund early childhood research and technical assistance, plus $62,500 to Early Learning NH to provide support to Spark NH in strengthening the early childhood field in NH. And in 2014, the Monadnock United Way and NH Charitable Foundation funded Impact Monadnock to develop and prioritize early childhood development efforts in the region.

One NH project that has garnered national attention is the Seacoast Early Learning Alliance, which launched in 2011 with funding from the United Way of the Greater Seacoast, the NH Charitable Foundation and the NH Community Development Finance Authority. Through the Alliance, Seacoast area early childhood programs have come together to share resources, increase their purchasing power and use savings to improve the quality of their programs. Had the federal grants mentioned at the beginning of the story come through, part of the funds would have been used to expand the Alliance statewide, Cowell says. So as the NH Legislature and governor enter what is anticipated to be a contentious budget season, early childhood advocates will be among those advocating for increased funding.