Education Week - February 26, 2014 - 11

Public Pre-K Puts Competitive Heat on Private Providers
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parents of babies and younger toddlers.

"Seventy percent of children in
Louisiana ages 0 to 5 have all parents
in the workforce. So we know
they're somewhere when their parents
are working," said Melanie
Bronfin, the policy director for the
Louisiana Partnership for Children
and Families. "Our fear is they're in
unregulated, unlicensed settings."
Louise Stoney, the co-founder of
the Alliance for Early Childhood Finance,
an information and advocacy
group, said that she "fully supports
expansion of preschool. I am 100
percent supportive. I will take any
money you give me, in any way it
comes."
But, she said, "it's really easy for
well-meaning initiatives to have unintended
consequences."
Ms. Stoney described what she
calls the "iron triangle" of finance
for early-care providers: full enrollment,
full collection of fees from
parents, and revenues that cover
the cost of caring for children.
The triangle is often quite shaky
for the small businesses that comprise
most day-care centers, Ms.
Stoney said: They may be underenrolled,
have a hard time collecting
fees from parents, or charge fees
that barely cover their costs for fear
of losing customers.
Once an outside player enters the
market-such as a publicly funded
program-the whole system for a
private provider can collapse.
That's what happened to some
providers in St. Louis, where the
school system used money from the
settlement of a long-running desegregation
case to add 700 tuitionfree
preschool slots three years ago,
bringing the district-run program
to about 2,000 seats in all. The program
offers free before and after
care, and has waiting lists at almost
every school where it is offered.
Financial Strain
But in the wake of the expansion,
the Nursery Foundation, founded in
1946 as a rare racially-integrated
child-care program in the city, shut
down last year. Cuts to federal Head
Start funding through budget sequestration,
along with state cuts and
dwindling enrollment, doomed the
center, executive director Terri Olack
told the St. Louis Beacon newspaper.
"We've had a lot of competition
from the free program," she told the
paper in March, before the center
closed. The program charged parents
from $5 to $70 a week, per child.
"When you're a single parent trying
to put food on the table, a free program
outweighs a quality program."
Paula Knight, who as associate superintendent
of the 27,000-student
district manages the early-childhood
program, said that she was aware of
the discontent among some private
providers when she assumed oversight
of the program last July.
She said she has visited day-care
providers around the city to get a
better idea of their offerings. If parents
find that they are wait-listed at
a school, they can be steered to one
of the prescreened providers.
"I knew this was something worth
mending," Ms. Knight said, as did
the superintendent, Kelvin Adams.
"We don't want people to think
we're just grabbing at kids."
For Ms. Harris, at Royal Castle,
the competition is not just for students,
but for teachers. To meet
state rules and Head Start regulations,
teachers of 4-year-olds at
Royal Castle have to have college
degrees. But she is not able to pay
her staff more than $13 an hour,
"
in a paper published in 2012 for the
National Bureau of Economic Research.
They studied Oklahoma and
Georgia-two states with universal
preschool programs for 4-year-olds.
In Oklahoma, preschool is pro-
vided through the public school system,
and about 40,000 students were
enrolled in the 2012-13 school year.
In Georgia, the program is a more
voucher-like subsidy, which parents
can use at public and private providers.
About 82,000 children were
enrolled in the 2012-13 school year.
The researchers found a complex
series of effects.
In Georgia, the number of pri-
We don't want people
to think we're just
grabbing kids."
PAULA KNIGHT
St. Louis Public Schools
and employees-including Ms. Harris-receive
no benefits.
"Degreed teachers want to get
paid for their education. That is always
the issue for me," Ms. Harris
said. "I can't pay them what they're
worth." After employees gain experience
working at Royal Castle, they
are often snapped up by local charter
schools and placed in positions
where they can earn nearly twice as
much, and receive health-care and
retirement benefits, she said.
The feared impacts of publicly
funded programs aren't always a
given, however. Researchers Daphna
Bassok, Maria Fitzpatrick, and Susanna
Loeb explored the phenomenon
of private preschool crowdout
vate programs expanded with the
advent of the publicly-funded program,
which might be expected, the
researchers said, because parents
were able to use the subsidy at either
a public or a private preschool.
In Oklahoma, the public program
did not lead to a significant contraction
in the private child-care
market, the study found. The researchers
hypothesized that existing
private programs got smaller
but were able to stay in business, or
they were able to provide services to
children enrolled in half-day public
preschool programs.
The best situation for private providers,
said Ms. Stoney, of the Alliance
for Early Childhood Finance,
would be a situation where they
could also have access to the public
dollars. "States need to get much
more sophisticated about enabling
diverse delivery," she said.
Creating Partnerships
Allowing a multitude of highquality
providers undergirded West
Virginia's universal preschool program,
said Clayton Burch, the executive
director of the state's office
of early learning. The lawmakers
who voted for universal preschool
back in 2002 also required that jurisdictions
provide at least half of
their slots for 4-year-olds through
collaboration with private providers,
Head Start programs, or child-care
centers. Currently, about 74 percent
of 4-year-old preschool slots are
operated in collaboration with
community partners, Mr. Burch said.
Burch said such work is best done
when a state or city is in the earliest
stages of expanding preschool
programs. "It's really difficult if
you've already got a system, and
you've already put these places out
of business," he said.
Such a partnership is something
Ms. Harris dreams of in New Orleans.
She has already reached out
to a local charter school to see if she
can forge a connection where children
from her center matriculate to
that school. Her employees might
be able to share in the benefits
package offered by the charter.
Until then, she works to keep her
program afloat.
"I really try to push our program,"
she said. "I tell parents, we do have
a degreed teacher working in the
classroom, we are the same program
that they have at the Catholic
schools. We are required to make
sure the kids are prepared for kindergarten."
She also provides a
Head Start program, which brings
in federal dollars.
Some parents, however, are
drawn to the state-funded program
for their 4-year-olds, or to a program
based at a school that feels
more academically oriented than
her center, she said.
"We need to think about how to still
provide care for the zero to threes,"
she said. "We have to get these kids
ready. They're important too."
EDUCATION WEEK | February 26, 2014 | www.edweek.org | 11
Pearlie Harris, the
director of the Royal
Castle Child
Development Center,
works with children at
the school in New
Orleans. The private
early-childhood center,
which serves children
up to age 4, finds itself
in competition with
Louisiana's free
preschool program,
especially for older
enrollees.
Ted Jackson for Education Week
http://www.edweek.org
Education Week - February 26, 2014

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