Public Policy Forum's top five research findings of 2012

If it’s December, then it must be time for the Forum’s annual list of its top five research findings of the year.  Last year’s list included findings on MMSD’s daunting capital needs, the dramatic decline in Milwaukee County’s corrections population, the City of Milwaukee's reliance on state shared revenue, and our region’s tardiness in embracing strategic economic development planning.  The 2012 list is summarized below in chronological order:

1. More than four-fifths of Milwaukee County’s rated child care providers stand to lose funding under YoungStar, the state’s new child care quality rating system.  Our January report analyzing the first year of Youngstar implementation examined the ratings earned by 534 child care providers in Milwaukee County as of December 2011.  We found that 428 (80.1%) received 2-star ratings and 33 (6.2%) received 1-star ratings.  In light of the state’s plan to reduce Wisconsin Shares subsidy payments for 2-star providers and disqualify 1-star providers from Wisconsin Share payments entirely, that meant more than 80% of the rated providers would lose funding under YoungStar, a consequence that could impact the availability of child care options.

2. Much of the growth in the Milwaukee Parental Choice Program in the past year appeared to come from existing private school students.  The 2011-12 school year was the first to reflect the impact of major changes to school choice program eligibility adopted in the 2011-13 state budget, including an increase in the enrollment cap, broader eligibility limits, and expansion to schools outside the City of Milwaukee.  Our annual survey of voucher school participants released in February revealed not only that much of the growth in voucher use from the previous year was in schools that already participated in the program, but also that it appeared to have come from students already enrolled in those schools.  

3. Fire department consolidation that preserves existing capacity can still save millions.  In May, we released a comprehensive report on options for sharing or consolidating fire services in the southern Milwaukee County communities of Franklin, Greendale, Greenfield, Hales Corners and Oak Creek.  Our finding that a full consolidation option could save nearly $2 million annually may not have been surprising to those who have examined fire service consolidation proposals in other states, or to those familiar with Milwaukee County’s consolidated North Shore Fire Department.  It was illuminating to find, however, that such substantial savings were achievable without eliminating any fire stations or reducing direct firefighting staff.

4. MATC’s technical diploma offerings are generally attuned with the region’s projected job openings.  Our December report on the activities and resources of Milwaukee’s key workforce development players examined MATC’s role in providing non-degree occupational training to job seekers.  We found that despite longstanding criticism of the college for failing to appropriately align itself with the needs of area employers, MATC’s technical diploma offerings match up well with Department of Workforce Development projections regarding future job openings.  Nursing, Barber/Cosmetologist and Emergency Medical Technician were the most heavily enrolled technical diploma programs in the 2010-11 academic year. 

5. MPS’ five-year fiscal forecast is more optimistic than those of Milwaukee County or the City of Milwaukee.  Our December fiscal assessment of the Milwaukee Public Schools examined the district’s most recent five-year fiscal forecast and found that its projection of a $41 million deficit in 2017 is plausible and perhaps even a bit on the conservative side.  While a projected deficit of that magnitude certainly is not ideal, it is more optimistic than the five-year deficits projected by the City of Milwaukee and Milwaukee County earlier this year.  It is important to note that each government’s five-year forecast is based on financial modeling that is somewhat speculative in nature, and that a complete understanding of the fiscal condition of each must go far beyond their five-year forecasts.  Nevertheless, given the substantial position cuts and general gloom surrounding MPS’ budget in recent years, to find that MPS’ five-year challenges may not be deeper than those of the city and county was somewhat surprising. 

With 18 research reports in 2012, it was not easy to reduce our list of top findings to five. Left off the list this year were important findings related to the application of the state’s new child care ratings system to afterschool care providers; the out-of-classroom spending habits of Milwaukee County suburban school districts; the range of case management services available to persons with mental illness in Milwaukee County; opinions on mental health redesign by nurses and their employers; and the continued impacts of pension and health care benefits on Milwaukee's city and county budgets. Those interested in reviewing those and other findings can access the Forum’s full list of research publications here.

Should we be concerned about the decline in family child care providers?

During the debates over Wisconsin's new child care quality improvement initiative, the YoungStar quality rating system, it became clear that an anticipated trade-off for quality improvement was likely to be a reduction in the number of child care providers.  The providers predicted to most likely be negatively impacted were family child care providers (who care for small numbers of children in their own home), as the new quality standards would differ dramatically from the current certification and licensing requirements for these providers. In addition, the Forum's own survey work found family child care providers to be less likely to have the financial and organizational resources needed to make significant investments in quality.  Finally, many observers felt there could be an over-abundance of family child care providers, particularly in Milwaukee County, and that increased parental demand for higher quality care might expose that reality.

In fact, according to a recent analysis by the Wisconsin Council on Children and Families (WCCF), there has been a significant decline in the number of family child care providers, as compared to years prior to YoungStar.  Statewide, there has been an 28% decrease in the number of family providers over the past seven years, including a 63% decrease in the number of certified providers, who had the least rigorous regulatory requirements prior to YoungStar.  WCCF finds the drop in family child care providers in Milwaukee County to be even more dramatic, with a 33% decline in just the past four years.

Should these results be troubling?  It's hard to say.  While there is a need to monitor whether this reduced supply in the family child care market negatively impacts child care access, to date there is no indication that parents have less access to quality care despite the reduced number of slots.  The changes may simply mean the supply has adjusted to match demand.

Conversely, at least a few child care providers feel the new regulations, coupled with the state Department of Children and Families' focus on fraud reduction, are having an unconstitutional disparate impact on African-American child care providers in Milwaukee and several have filed a federal law suit.  Although the claim does not provide statistics, it does seem possible that most of the suspended licenses and certifications were held by African-American providers.  As of March 2012, of the 281 providers listed on the website of the Department of Children and Families as suspended, the vast majority (90%) are located in Milwaukee. The state does not report the race of these providers, but the Forum's 2010 survey of child care providers found that while 10% of Wisconsin's providers are African-American, the rate increases to 48% in Milwaukee County. Thus, to the extent Milwaukee providers make up most of the suspended providers, it is likely that African-American providers are over-represented among them.  Whether this is a disparate impact and, if so, whether it is intentional will likely be difficult to prove.  However, even if no intent is found, if the perception that the state is targeting Milwaukee's African-American providers is widespread in the city, it may prove to be a significant hindrance to the state's efforts to reach out to Milwaukee parents about the importance of choosing a high-quality provider.

Another concern may arise if the family child care providers who have left the market stay unemployed or leave the labor force altogether.  The Forum found in our 2010 report, "Moving the Goal Posts: The shift from child care supply to child care quality," that the state's restructuring of the subsidy program was likely to have unintended consequences for child care providers.  We cautioned that "if this system reform is to be effective, then it is important to understand that the child care system we have today is the result of policy goals originally designed to impact the supply of care..."  Reforming welfare and creating a new child care subsidy program enabled low-income parents to join the workforce, including thousands who found new jobs as family child care providers.  The subsidy program was designed to emphasize child care supply over child care quality in order to effectuate the goals of welfare reform. It is important to recognize that these supply-oriented actions created jobs in the child care market; dramatic quality-oriented changes in the market will now affect those same jobs.  


Finally, given the fact that family child care is less expensive than center-based care, any decrease in the supply may negatively affect families who cannot afford to utilize a child care center.  YoungStar is designed to make higher quality care more affordable to low-income families by increasing the subsidy rate for higher quality care.  Whether the increase is enough to neutralize the impacts of the decreased supply in the low end of the market over the long term is yet to be seen.  For now, families appear to be able to remain the in the regulated market.  However, there remains a potential for growth in cheap, unregulated care, which should be monitored.  

YoungStar's impacts on the Milwaukee child care market

In June 2010, in the wake of detailed media accounts of widespread fraud in the Wisconsin Shares child care subsidy system and growing evidence that high-quality child care promotes positive academic outcomes, the Wisconsin Legislature approved a new quality rating and improvement system (QRIS) for the state’s nearly 8,500 regulated child care providers. In a new Forum report, we analyze initial data collected for Milwaukee County child care providers during YoungStar’s first year. Through this analysis, we gain important insight into the initial impacts of the new program on the county’s unique child care market, including where key policy objectives are being realized, and where potentially unintended consequences are emerging.

Key findings from the Forum's analysis of YoungStar's first year include the following:

• In Milwaukee County, 46% of participating providers were rated by YoungStar as of December 2011. Of those 534 providers, a total of 428 (80.1%) received 2-star ratings, while 50 (9.4%) received the highest rating of five stars. An additional 33 providers (6.2%) received 1-star ratings, meaning they no longer will qualify for subsidy payments from the state's Wisconsin Shares program.


• In light of the state’s plan to reduce payments for 2-star providers while providing a bonus for those who receive four or five stars, more than 80% of the providers rated thus far will receive less money under Wisconsin Shares when the tiered reimbursement system is implemented in July. Wisconsin’s QRIS is the only such system in the country that uses this type of “carrot and stick” approach. Its impacts on the child care market in Milwaukee County will bear watching.


• The data reveal several significant differences between Milwaukee County’s family providers (those who provide care in their home) versus group center providers. For example, 35% of group center providers received 5-star ratings compared to less than 1% of family providers. Conversely, 90% of family providers are at the 2-star level compared to 52% of group center providers. Thus, a much higher percentage of Milwaukee County’s group center providers will receive additional state support, while far more of the county’s family providers will feel the pinch of reduced state assistance.


• The rating data show there is considerable variation among providers at the same star level. Two-star providers, for example, which make up over 80% of the Milwaukee County providers rated thus far, vary dramatically in YoungStar’s staff education category. It is evident that some 2-star providers have highly trained staff but fall short in YoungStar’s other categories of assessment, while other providers with the same star rating have little to no relevant training in early childhood education.


• Some areas of the city and county enjoy significantly better access to high-quality child care than others. Among Milwaukee County’s 35 ZIP codes, 13 have at least one high-quality child care provider (defined as receiving either four or five stars) for every 1,000 young children, and 19 have at least one high-quality provider for every 10,000 workers. For a handful of other ZIP codes concentrated in the City of Milwaukee’s northwest and far south sides, no high-quality options exist despite large populations of both children and workers.


• Many providers are close to achieving the minimum point totals required for a higher star rating, but may be unable to afford the investments necessary to move up the rating scale. In addition, the challenges of meeting YoungStar’s minimum staff education requirements for 3-star ratings and above appear to be a major hurdle for many low-rated providers.

As additional Milwaukee County providers are evaluated by YoungStar in the coming years, it will be important to track these trends and determine whether the new system’s support structure and financial incentives are supporting quality improvement effectively.

In rating child care provider quality, Wisconsin can learn from other states

In June 2010, Wisconsin’s Joint Committee on Finance approved YoungStar, a new quality rating and improvement system (QRIS) for the state’s nearly 8,500 child care providers. YoungStar supporters believe the new system will improve the overall quality of childcare in Wisconsin by motivating and supporting providers to make quality improvements and by providing parents with the information they need to choose high-quality child care options.

In the Forum's latest Research Brief, we examine several issues and challenges that have arisen in other states or jurisdictions with QRIS policies, how those entities have tackled those challenges, and the lessons their experiences might yield for Wisconsin. We found five common implementation challenges that have confronted other states and that have the potential to occur in Wisconsin, as well.

1. Bridging the disconnect between theory and policy: QRIS policies are partly based on a theory that greater demand for quality child care will cause quality to improve. Yet, the QRIS policy provides incentives to child care suppliers, not those in demand of care. This disconnect can be bridged via extensive outreach to parents to educate them about the rating system and its benefits, or by creating financial incentives for parents to choose higher-quality care. Wisconsin is planning an outreach effort, but may also wish to explore demand-side incentives should it become clear that demand for higher-quality care is lacking even after YoungStar is fully implemented.

2. Establishing meaningful differences in quality across tiers: QRIS policies assume that there are real differences in quality across the ratings tiers—meaning higher-rated providers benefit child outcomes more than lower-rated providers. If tiers are poorly defined, or if the cut-points between tiers are arbitrary, there may not be meaningful difference in quality between providers with different ratings. Wisconsin will not know if this is a problem until all providers have been rated and have had time to make improvements needed to move up along the tiers.

3. Coordinating QRIS policy with existing quality improvement policies: Wisconsin already has several policies and funding streams in place aimed at improving child care quality. Coordinating these efforts with QRIS so as to maximize the positive outcomes of these many investments could potentially be a challenge. Provisions regarding technical assistance and improvement grants appear to be reinforcing QRIS goals; however, professional development scholarship and stipend programs have yet to be tied to YoungStar.

4. Promoting higher quality systemwide without causing higher costs systemwide: Increasing the state reimbursement to child care providers serving low-income families as their quality ratings increase, otherwise known as tiered reimbursement, is a common incentive used in many states. Wisconsin’s tiered reimbursement strategy is unique, however, in that it not only increases reimbursement for highly-rated providers, but also reduces reimbursement for low-quality providers. As no other state has implemented a carrot and stick approach, Wisconsin cannot use other states’ experiences to predict the effect the tiered reimbursement will have on costs to private pay parents.

5. Inadequate financial planning: Improving the quality of the child care market is a costly endeavor. To do so will require adequate and sustainable revenue sources, not only for conducting YoungStar rating and improvement processes, but also for subsidizing the higher program costs that may result from the improvements. Because Wisconsin has a unique tiered reimbursement structure, the financial plans of other states are not useful in helping estimate potential costs here.

Despite the 26 child care quality rating and improvement systems across the country, a robust body of research has yet to develop that can provide insight into the effectiveness of specific state child care regulatory policies. As a result, Wisconsin, like other states, must be prepared to closely monitor the costs and the child outcomes resulting from its QRIS policy, and make policy changes as necessary.

Are Milwaukee County's child care providers ready for YoungStar?

New results from a statewide survey of 1,425 child care providers show that Milwaukee County providers compare favorably to providers across the state with respect to several measures that will be rewarded under the state's new YoungStar child care rating system.

The survey, conducted by the Forum in partnership with the Wisconsin Early Childhood Association, was designed to provide a picture of the status of the early childhood workforce in the state. Provider characteristics such as educational attainment, experience, professional credentials, and salary were measured. Providers were also given a chance to express their opinions about the new rating system.

Key findings include:

• The 223 respondents from Milwaukee County demonstrate higher educational attainment and earned professional credentials than their colleagues statewide, factors that can earn a provider a higher rating under YoungStar.


• Providers in Milwaukee County appear to enjoy greater access to professional development than providers elsewhere in the state, via higher rates of membership in professional associations and use of scholarship and stipend programs.


• Providers in Milwaukee County have higher median wages than the state as a whole and have higher child care subsidy usage rates. Not surprisingly, Milwaukee County providers also charge higher fees.


• Child care centers in Milwaukee County are more likely to be accredited. Accreditation can mean a center automatically receives the highest rating under YoungStar.


• Milwaukee County providers are more likely to see YoungStar as an opportunity to improve the quality of their early childhood programming than providers statewide.

For the full report, visit the Forum's website.

PPF's top research findings of 2010

The Forum recently received a communication from a national research group detailing its top five findings this year. That got us to thinking about our top five research findings of 2010. The competition was stiff, but here they are, in chronological order (drum roll please):

1. Southeast Wisconsin's skilled workforce may be its greatest economic strength. Our March Innovation Index report benchmarked our region with three Midwestern peers and three innovation leaders using several indicators linked to success in building a knowledge-based economy. While the overall assessment was mixed, we found southeast Wisconsin was number one among the group in its percentage of residents working in middle-skill jobs, i.e. those that require specialized training or education beyond a high school diploma, but less than a four-year degree. The finding suggests that while our region may be lacking in college graduates, we still possess the type of workforce that should be very attractive to certain industries.


2. Milwaukee County's structural deficit is really, really daunting. In our July preview of the county's 2011 budget, we used the county's fiscal forecasting tool to determine how its five-year fiscal outlook would change under two relatively dramatic scenarios: 1) the property tax increased at double the projected growth rate, or 6.6% per year, for each of the next five years; or 2) projected growth in salaries and fringe benefits was reduced by 50% and 25% respectively in each of the next five years. We found that in both cases, the projected structural deficit in 2016 still would be in the range of $65 to $70 million. Quite a challenge, indeed, for the next county executive.


3. MATC clearly spends more than its peers. Our September fiscal assessment of the Milwaukee Area Technical College found an institution struggling to accommodate shrinking revenue streams at the very time that demand for its services had reached historic highs. While plummeting property tax capacity and shrinking state revenues certainly hurt, however, it appears there is capacity to make adjustments to the expenditure side of MATC's ledger. Our research compared MATC with 84 other large two-year technical and community colleges nationally with regard to total operating expenses, salary expenditures and fringe benefit expenditures. We found that MATC ranks number one in expenditures per full-time-equivalent student on each of those measures.


4. Milwaukee County's mental health system is out of balance. Our October report on mental health care for adults in Milwaukee County - released jointly with the Human Services Research Institute - found a system that is out of sync with national trends and best practices in light of its emphasis on inpatient care and its lack of comprehensive community-based services. Particularly telling was a finding that the county's 472 public and private acute inpatient beds are nearly triple the number that would be expected in a mature mental health system that contains the appropriate balance of inpatient, crisis and community-based services.


5. The state's expensive child care subsidy program has grown as household incomes have shrunk. When the state created the Wisconsin Shares child care subsidy program in 1996, all low-income families became eligible, not just former welfare recipients. Participation has grown nearly 350% since then, in part because of a decline in household incomes. Whereas the program's eligibility limit of 185% of federal poverty line represented 57% of the state median income in 1999, today it equals 68%. As we point out in a December report, this trend does not bode well for the state’s new child care quality ratings system initiative, as a continued decline in household incomes may mean continued growth in program enrollment. That, in turn, could translate into less money available to offer incentives to providers for quality improvements.

Narrowing the list to five wasn't easy. We were forced to leave out additional key findings from reports on the Milwaukee Parental Choice Program, the region's public schools, regional property values and taxes, the City of Milwaukee's Main Street Milwaukee program, and three People Speak surveys, among others. Each of the 20 reports the Forum has published so far this year can be accessed here.

Moving the goal posts on early childhood care and education

The Forum's latest report on early childhood education finds the original goals of welfare reform produced state child care policies that had detrimental impacts on child care quality and that may be difficult to reverse under YoungStar, the state’s new quality ratings system initiative.

The report finds that as the existing Wisconsin Shares child care subsidy system became operational, certain policy decisions produced results – many of which were unintended – that ended up boosting child care costs for the state while reducing child care quality. Those include:

1. Creating a new, less regulated category of care provider, which was intended to allow parents broader choices in providers, quickly create jobs, and keep child care costs low for parents and the state.


2. Sharing costs with parents by basing co-payments on the cost of care, as opposed to the parents’ income, which would have allowed parents to opt for more costly care only if they wished to pay more out of pocket but which, ultimately, could not be implemented.


3. Creating a more restrictive definition of “low-income,” in order to serve the working poor in general, and not just those obtaining or seeking jobs as part of the W-2 program.


4. Tying subsidy rates to prices in the private market, which was intended to provide low-income parents with access to the entire market while also relying on competition to keep the state’s costs in check.

Each of these four policies helped the state achieve its primary goal of providing a sufficient child care supply that would allow low-income parents to move from welfare to work, but at a high cost to the state and at the expense of quality within the child care market.

As policymakers look to reform the system under the new YoungStar initiative, can they successfully change the emphasis to quality within a system originally built to emphasize low cost and quantity? The policy challenges with which YoungStar’s designers and implementers must grapple include:

• Stepping up collections of co-payments from parents. Under YoungStar, child care providers will be contractually obligated to collect parent co-payments, which they have not been required to do previously. An enforced co-payment requirement might cause providers who serve mostly low-income families to leave the program if they are not able to collect the co-payments, even if they are providing quality care.


• Keeping income eligibility limits for working families at current levels. The pool of families eligible for Wisconsin Shares subsidies is growing because Wisconsin family incomes are not, which swells overall program costs. As more money is tied up in providing access to care, less will be available to improve the quality of care. Options for cutting costs would be to reset eligibility limits to exclude more families, or to appropriate a sum-certain amount and create a wait list for the subsidy. Both of those options, however, would retreat from the goal of serving all the state’s low-income families.


• Tying subsidy rates to quality so as to incentivize quality improvements. Higher subsidy rates for higher quality might price some private pay families out of the market. If that were to happen, such families may have to seek lower quality options than they are using today. In addition, because YoungStar has been designed to be revenue neutral (at least initially), most providers will continue to earn the same subsidy rate after the initial round of quality rankings as they do today. If providers are not certain their investments in quality will result in higher subsidies, they may not see YoungStar as an incentive to improve.

Several policy options are highlighted for consideration as YoungStar’s implementation moves forward, including having the state collect parent co-payments directly, reducing the subsidy for lower-quality providers, and eliminating one category of provider—the minimally regulated provisionally certified provider.

In the end, the success of YoungStar may well rest on the ability and willingness of administrators and legislators to monitor real-world impacts on families and the child care market in Milwaukee County and to be flexible enough to tweak policies throughout implementation, in order to avoid a new set of unintended consequences.

Wisconsin ranks in top ten in child care costs: child care more expensive than college

Wisconsin ranks among the 10 most expensive states for child care in a new report from the National Association of Child Care Resource and Referral Agencies.


The NACCRRA found that full-time care for an infant in the average Wisconsin child care center, at $10,520 per year, exceeds 13% of the annual median family income for a two-parent family, placing Wisconsin among 36 states for which the cost of infant care exceeds 10% of the median family income. For a family earning at the poverty line, full-time infant care would exceed 57% of annual income.

In addition, Wisconsin is 4th most expensive when the cost of center-based care for a 4-year-old is considered ($9,039 per year, or over 11% of the median family income) and 3rd most expensive for afterschool care for school-aged children ($8,223 per year, or over 10% of the median family income).

As someone who no longer needs full-time child care with last week's start of the school year, I was well aware of the cost. But I was quite surprised by the report's finding that child care has become one of the largest monthly outlays for Wisconsin families, costing more than the average monthly rent payment, grocery bill, utility bill, and even health care. In fact, average child care costs for two children exceed the average mortgage cost for Wisconsin families.


The good news, if you choose to see it that way, is that these Wisconsin families should have no problem affording college tuition when the time comes--they are already paying more for child care than they would for most of our state's public four-year universities.

Fiscal estimates suggest quality early childhood education is costly yet beneficial

The annual cost of operating a high-quality child care or early education center in southeast Wisconsin is an estimated $11,000 per child, more than double the cost of a typical program in the region today, according to the Public Policy Forum’s latest report from its three-year research initiative on early childhood care and education.

The report, “The Price of Quality: Estimating the Cost of a Higher-Quality Early Childhood Care and Education System for Southeast Wisconsin" stresses that only high-quality programs reap the long-term benefits our region needs most, such as better student achievement and improved graduation rates.

Noting that many other states have invested in child care quality improvement policies in order to capture those long-term benefits, the report intends to help policymakers cost out their options for improving child care quality in Wisconsin. The report provides fiscal estimates on a status quo scenario, a mid-level option and a high quality scenario for state policymakers to consider. While the report’s estimates include only the seven-county southeast Wisconsin region, the policy decisions likely will be made at the state level.

Main findings include:

· The direct costs of operating the region’s current system of early childhood care and education is an estimated $370.5 million annually to serve over 66,700 children. To operate the same sized system at a high-quality level would cost an estimated $671 million annually;

· Policies aimed at maximizing quality would be the most expensive, while a more modest improvement in quality in the region would result in total direct costs of $506.2 million;

· While taxpayers pay for direct costs only to the extent that they subsidize costs for low-income families, certain indirect costs are paid for by taxpayers, including regulation and monitoring of child care providers. These indirect costs would increase if policies were put in place to improve quality in the region and are estimated to total almost $7.5 million during the initial phases of any quality improvement initiative;

· The long-term economic and social benefits that can result from improved quality care and education are maximized when the care is of the highest quality. In addition, the benefits for at-risk and low-income children are larger than for other children.

The report presents several policy options for policymakers, ranging from low-cost and low-return on investment to high-cost and high-return. The least costly option is to maintain the current regulatory system and the focus on fraud prevention. The most costly option is to reform the system as a whole, requiring smaller caregiver-child ratios and requiring caregivers to have four-year degrees, for example. Other options include incremental improvements in quality over a period of time, focusing on improving quality for the neediest children, or a Quality Rating and Improvement System that gives parents information about the relative quality of programs. The report also analyzes five different models for financing quality improvement initiatives.

The Governor and the Legislature have child care on their radar screens right now in light of the serious fraud problems that have arisen in the Wisconsin Shares program. For the sake of children and our regional economy, stamping out fraud in Wisconsin Shares must also involve consideration of how to improve quality. This report’s overview of costs and policy options aim to provide context for upcoming legislative deliberations.

MPS teachers link preschool to better performance in Kindergarten

Survey results released today by the Public Policy Forum conclude that MPS Kindergarten teachers feel high quality early childhood education can have positive impacts on school readiness and academic performance. The survey is part of the Forum's three-year research project investigating the impacts of high quality early childhood education on economic development.

Of the 77 five-year-old Kindergarten (K5) teachers surveyed, nearly all (97%) feel they can generally tell early in the school year which of their students attended preschool or four-year-old Kindergarten (K4), and a similar portion (93%) feel attending preschool or K4 better prepares students for K5. All teachers feel spending time in preschool or K4 prior to starting K5 is important.

With regard to the specific skills deemed necessary for Kindergarten, teachers report that the skills that are more difficult to impact during the K5 year are the skills that students are more likely to lack upon entering Kindergarten--skills pertaining to social/emotional development and cognition/general knowledge. However, teachers feel that high quality early childhood education can help children get ready for school in these hard-to-impact skills groups and believe the effects last through K5 and beyond.

When asked about their 2008-2009 class of K5 students, 45% of the teachers surveyed report having classrooms in which at least 80% of the students had attended preschool or K4, and 54% report that at least half of their students were adequately prepared for K5. However, teachers in schools with student poverty rates above the district average are significantly less likely than teachers in lower-poverty schools to report that the majority of their students had attended preschool or were adequately prepared for Kindergarten.

The survey’s reinforcement of the connection between the quality of early childhood education and school readiness suggests that policymakers seeking to improve academic performance in MPS may wish to consider ways to increase quality early childhood opportunities for Milwaukee children. Because there appear to be links between poverty and preschool attendance and between poverty and school readiness, another area of focus may be accessibility and affordability of high quality early childhood education specifically for low-income families, as well as the quality of programs currently available and affordable to these families.

The full report is available for download here.

Child care quality: Third time is not a charm

Governor Doyle's third attempt to include a Quality Rating and Improvement System (QRIS) for child care made it through the joint finance committee this time around, but appears not to be included in the Assembly and Senate versions of the budget bill. A QRIS is a voluntary rating system for child care providers that is designed to recognize quality and provide incentives to improve quality, while also allowing parents to compare quality across providers.

The most simplistic explanation for the failure of the QRIS in the past three budgets has been funding. In the first go-round, the system was introduced with an assumption of no net fiscal impact, which was unrealistic at best and disingenuous at worst. Last biennium, the price tag was attached and was deemed too pricey. This time, the Governor's proposed budget included the policy framework in this biennium, with the funding to be appropriated in the next biennium; in these uncertain times, lawmakers were reluctant to commit future funds.

Not having a child care QRIS puts Wisconsin out-of-step with other states, the majority of which have or are planning one. So how do they fund theirs? Most do as Wisconsin might have, with a tiered child care subsidy program that re-distributes the federal TANF (commonly known as welfare) funds for child care unevenly--recipient parents choosing higher quality child care get subsidized at higher rates. This, of course, necessitates that low quality child care is subsidized at a lower rate. (This lower rate would have to be lower than the current rate in order for the QRIS to cost the same as the current subsidy program.)

One state has gone about it differently, however. Louisiana has created four different tax credits to provide the fiscal incentive for participation in the state's QRIS and for improving quality. Notably, three of the four tax credits are refundable, meaning that even taxpayers who don't owe taxes can take advantage of them. The tax credits are supplemental to the state's child care subsidy program and do not replace the subsidy rates. But they are intended to provide incentive for parents and providers to participate in the QRIS and to help make quality improvements affordable.

The credits are for families who choose providers in the QRIS, with higher credits for those choosing higher quality care; for providers who participate in the QRIS, based on their quality rating and the number of subsidized children they serve; for teachers and directors who work in centers that participate in QRIS, based on their level of training and education; and for businesses that make donations to QRIS providers.

The hope is that the credits will impact consumer behavior by creating fiscal incentives for parents and providers to create a demand for higher quality in the child care market. The theory is that the tax benefits will be widely marketed by the industry, similarly to the home mortgage tax deduction, which is promoted by real estate agents, banks and developers who encourage home buyers to take it into consideration when making decisions about the home they purchase. Louisiana has hired a marketing firm to create a social marketing campaign for both the ratings system and the tax credits.

As these tax credits have been in place for just one year, it is too early to tell who is taking advantage of them and to what extent. The state estimates 1,247 teachers and directors and 73 centers were eligible for them, totaling approximately $3.5 million in state tax benefits. As centers improve their quality and earn higher ratings, and as more centers participate in the QRIS, that dollar figure would grow.

Whether Wisconsin might follow in Louisiana's footsteps is highly questionable. Supplementing federal child care subsidy dollars with state tax credits hasn't been on the table here even when a QRIS was on the table. Also, Louisiana, which passed the legislation creating its tax credits last year, before the recession was in full swing, was one of the few states not running a budget deficit at that time.

Unlike a budget appropriation, which is subject to change each year, tax credits must be repealed in order to be eliminated or reduced, which is significantly more difficult politically. Thus, Louisiana's program will likely have more stability than those of other states and will thus be monitored very closely by policy researchers. Among the questions to be answered--Will it increase participation in the QRIS? Will it increase child care quality? At what cost?

The Economic Impact of the Child Care Industry in Southeast Wisconsin

Lately, mention of child care is likely to evoke recollections of scandal and fraud. What sometimes gets ignored is that child care is an industry in its own right that makes a sizeable contribution to the regional economy.

The Public Policy Forum’s latest report from its three-year research project on early childhood care and education, “The Economic Impact of the Child Care Industry in Southeast Wisconsin” quantifies the size, impact and characteristics of the industry.

The aim is twofold: to provide policymakers and economic development officials with a sense of the economic magnitude of this industry, and to lay the groundwork for a follow-up report – to be released later this year – that will enumerate the costs and benefits of a potential high quality early childhood care and education system in southeastern Wisconsin. Taken together, these reports will provide insight for policymakers as to the scope of investments that would be required to achieve a high quality system, and the returns that might be generated should those investments materialize.

Key findings:

• Southeast Wisconsin’s child care industry employs roughly 12,400 people. It also creates and sustains approximately 7,000 other non-child care jobs in the region by generating additional employment in related industries.
• The region’s child care industry generates an estimated $661 million in gross receipts annually.
• Economic modeling using industry “multiplier” figures suggests that the child care industry’s purchases generate another $648 million in sales in other industries.
• Southeast Wisconsin’s child care industry frees up an estimated 15,914 parents of children under age 6 for work, who earn an estimated $742 million annually.

These findings indicate that the child care industry is a significant creator of jobs and economic activity in the region. Furthermore, they suggest that the industry functions as an element of economic infrastructure, meaning it might best be viewed similarly to roads, transit and electricity as a critical infrastructure component that enables people to participate in the workforce and the economy.

In light of this economic importance, policymakers who are considering regulatory changes and/or quality enhancements for the child care system must consider how such initiatives not only will affect providers and children, but also the larger economy that depends on this industry as a vital source of infrastructure and economic activity.

Click here to view the other research stemming from the Forum’s early childhood education project.

A shift in child care policy philosophy

At the Forum's Viewpoint luncheon last week (available as a podcast or video), Wisconsin Secretary of Children and Families, Reggie Bicha, noted that the creation of his department in the last biennial budget was the result of a shift in philosophy regarding child care policy. Where the state once viewed child care as a mechanism to allow parents to work, it now seeks to ensure children in care are in good environments for growth and development. This shift is reflected in the fact that child care licensing and the child care subsidy program are now housed in the same state agency. Previously the child care subsidy program was housed in the Department of Workforce Development.

But Sec. Bicha wasn't the only speaker at the luncheon to talk of a shift in philosophy. Milwaukee's Chief of Police, Ed Flynn, spoke of the need to view social expenses not as costs, but as investments. While he acknowledged that governmental accounting procedures don't facilitate the recognition of the long-term returns of these annual costs, he emphasized that such returns have resulted in "counter-intuitive" messengers like himself coming forth to advocate for more investment in early learning.

Chief Flynn also asked for a shift in perspective when debating child care policy. He objected to treating child care as an industry, noting that market dynamics do not apply as expected--high quality care is too expensive for the costs to be born by the parents. The model, he argued, should be more like that of public education.

However, Tom Gazzana, Corporate Vice President, Children's Hospital, and Jose Vasquez, CEO of the Child Development Center of St. Joseph, each offered a differing opinion on that point. Mr. Gazzana noted that market forces could be interjected by tying the amount of the child care subsidy to the quality of care, with parents choosing high quality providers eligible for higher rates of subsidy. Mr. Valdez argued that if the community could come together and agree on what we expect from a high quality provider, a value could be assigned to it. He also stated his opinion that quality can be achieved in more cost-effective ways.

In response to Mr. Valdez, the final speaker, Deborah Blanks, CEO of the Social Development Commission, argued that waiting for the community to come to agreement on its own would take too long...policy needs to be proactive.

The lively discussion engaged the audience, which asked the panelists many provocative questions, including whether the city's business leaders have recognized the state's shift in philosophy by taking a position on the need for high quality early childhood education. Listen in to hear more.

Clarke Street School program targets achievement gap

A new program at Milwaukee’s Clarke Street School, announced last week, will provide 80 first- and second-graders with extra help through elementary, middle and high school and a guarantee that they will be able to afford college. The I Have a Dream Foundation effort builds on a quarter-century of the foundation’s experience in similar programming in 29 cities. Early intervention tuition assistance programs are unique among education interventions for their combination of early, long-term support and the promise of eventual tuition funding. In some cases, programs similar to the I Have a Dream model have not been successful, revealing some lessons learned along the way. For example:

1. Start early, stay invested

After Minneapolis/St. Paul's Destination 2010 program's disappointing evaluation results, St. Paul’s then-superintendant commented, “You can’t ever start too early. Third grade – what if we had started even earlier?” (2/19/07 Pioneer Press article via LexisNexis).

Starting interventions early makes sense if the goal is to close or prevent the achievement gap; however, maintaining such an investment over the long-term is costly and can be difficult given changing politics and funding. For instance, in 1988 the New York Scholarship and Partnership Program experienced severe cuts and the program's students who had enrolled with promises of tuition help were suddenly out of luck (Coons and Petrick, 1992).

2. Emphasize the right incentive for success

The Twin Cities’ Destination 2010 program shows that it takes much more than some afterschool tutoring and a promise of tuition assistance to bolster struggling students. Five years into the program, tests scores showed that long-term monetary incentives were doing little to change students’ lives in the short-term, with program students performing worse in some testing areas than the comparison group.

The I Have a Dream model to be used by Milwaukee’s Clarke Street School program emphasizes relationships over tuition funding. The program will place a family outreach coordinator in the school to address poverty-related problems and family stability issues, ensuring that students and families receive extensive support. The intent is to make the program more than just a promise of eventual funding at the finish line.

3. Understand student barriers to success

The Twin Cities’ Destination 2010 program’s administrators thought they had a handle on the roots of the achievement gap, until their program enrollment was decimated by high student mobility.

Of the original 450 students who could have joined Destination 2010, 368 signed up. Five years later, only 215 students remained – fewer than half of the initial group. According to the program manager, 80% of those who left the program went "off the radar" (6/3/06 Pioneer Press article via LexisNexis). In addition, students who were initially from seven schools in 2000-01 had fanned out to 71 schools by 2002-03. It was common for many students to attend up to three schools in a single year, an obvious problem when trying to keep up with homework and learning. The program concluded, “We believe that lack of safe and affordable housing is at the heart of the mobility issue.”

The I Have a Dream Foundation model considers the impacts of mobility. The foundation’s website explains that often, students who are sponsored together at the same elementary school will attend different middle and high schools but will gather together for I Have a Dream programming at a local organization. This is important, as Milwaukee is no different from any other low-income, urban district with regard to mobility.

In 2006-07, Clarke Street School had a 13% mobility rate within the school year, with a 61% stability rate. This predicts that, of the 80 first- and second-graders in the new I Have a Dream program, 13% will be at a different school before the year’s end, and 39% will switch schools at the year’s end.

4. Protect program sustainability

As much as possible, it is important to insulate early intervention tuition assistance programs from the ebb and flow of budget politics. The worst case scenario would be to promise tuition to young students who later find no money available. A more common danger is that tight budgets serve to undercut program effectiveness. For instance, in the Twin Cities, school budget cuts resulted in higher teacher turnover, effecting continuity of teachers fluent in the program philosophy. State budgets cuts then reduced the availability of area after-school and tutoring programs – programs that were a key Destination 2010 intervention element to help kids stay on track (9/27/04 Pioneer Press article via LexisNexis). For long-term intervention programs, it is especially important to design a program that can make accomodations when faced with inevitable cuts in other areas.

Conclusion

Among early intervention tuition assistance programs, the I Had a Dream Foundation model has significant merit. However, when examining all types of interventions that target the achievement gap, many studies have suggested that investments in high-quality early childhood education interventions for children under age 5 have the highest long-term payoffs.

For the 80 first and second-grade children at Clarke Street School, this privately-funded program may have a huge impact if the lessons above are heeded. For the rest of the children in the district, and the infants and toddlers who will eventually be MPS students, large scale early intervention will need to take other forms.

PPF survey: Child care providers in a tough spot

The latest report of our research project on high-quality early childhood education finds that child care providers in southeast Wisconsin perceive certain quality improvements as too costly.

The findings fit with the results of our recent parent survey, which found parents do not demand certain markers of quality, such as accreditation.

The result is that providers looking to make improvements, such as obtaining accreditation, are in a tough spot: the improvements are costly and they will have a hard time passing the costs onto parents.

Which begs the question, Do policymakers value high-quality care enough to provide financial incentives to providers for making improvements? At the state level, so far the answer has been "no."

Coverage of the report is in the June 6 Business Journal.

Crime Prevention Could Get Brainy

A new study from the University of Cincinnati strengthens the evidence that lead exposure is linked to criminal behavior, and could refocus the spotlight on lead and juvenile crime in Milwaukee. The first study to follow lead-exposed children from before birth into adulthood, it shows that even relatively low levels of lead permanently damage the brain. The least-contaminated children in the study, with levels near average for U.S. children, still showed a link between criminal behavior and lead exposure.

Lead increases the very behaviors that can predict aggressive and violent behavior in children: distractibility, impulsiveness, restlessness, and a shortened attention span. Researchers found that every 5-microgram-per-deciliter increase in blood lead levels at age 6 was accompanied by a 50% increase in the incidence of violent crimes later in life. A related study found that those with the highest blood levels of lead during childhood had brains that were 1.2% smaller than normal.

Locally, Milwaukee has a nasty history with lead. A 2005 Journal Sentinel story reported the incidence of childhood lead poisoning in Milwaukee at 9.8%, six times the national average of 1.6%. In the past decade, an estimated 19,000 Milwaukee children younger than six have tested positive for elevated lead levels. Milwaukee’s high rates are attributed to the city’s older housing stock, which contains lead-based paint. A map of lead in local housing darkens the city’s poorest neighborhoods with black dots indicating over 8,000 lead-poisoned children per dot. Progress has been made in Milwaukee, which has a variety of lead abatement efforts. The number of poisoned children under age 6 dropped from a height of 31.9% to 9.8% between 1997 and 2004.

The Cincinnati study indicates that lead abatement services and screenings are an investment with large long-term payoffs. Funding lead abatement has the potential to save money in the long-run on expensive juvenile detention and special education services, and could potentially keep more people off welfare and increase their incomes over a lifetime.

Such long-term investment arguments parallel evidence recently presented by local police and sheriffs as well as the national group Fight Crime Invest in Kids that high-quality early childhood education leads to crime reduction (and cost savings) in the long-run due to positive influences on still-developing brain neurology. The future of crime prevention might include neurologists, preschool teachers and lead abatement specialists working together, while economists chart the return on investment.

Learning to count = accountability?

As more state and local governments decide to invest in quality improvements for early childhood education, two questions must be answered: What is the definition of high quality? And how will we know whether the investments have paid off?

Quality really comes in two forms, structural and process. Structural quality is that which can be measured: teacher turnover, child-teacher ratios, facilities, etc. It can set the stage for process quality--what the child experiences. Some elements of process quality are more difficult to measure; for child-teacher interactions, there is no standard for "lovingness." Other elements, however, are more similar to things we do measure in older children, such as educational attainment, behavioral adjustments, and hitting developmental milestones.

Which begs the second question: How do we hold early childhood educators accountable?

This month's State Legislatures magazine asks this same question, noting:

...[D]eciding the fate of preschool programs based on children’s test scores does raise concerns. Today’s teachers commonly use child assessments to help their instruction. But judging schools on these results could change what today is creative, play-based, multi-dimensional learning into practices that are geared only to the assessments. Instead of going outside to explore the changing seasons to learn science and math and engage their curiosity, children may be kept inside to sit and practice their letters and numbers.

The article highlights findings from the final report of the Pew Charitable Trusts' National Early Childhood Accountability Task Force. The report suggests four alternative approaches to accountability for early childhood programs, ranging from a universal analysis of the status of all children in the state, to a specific program-evaluation style analysis of individual providers.

According to the National Conference of State Legislatures, some 20 states are already utilizing the universal approach, by assessing children's school readiness status as they enter Kindergarten. Other states model the federal Head Start program and design program-specific accountability tests. At least one state evaluates individual preschool classrooms.

Any sort of testing of very young children is controversial. But as Samuel Meisels of the Erikson Institute puts it in a paper entitled Accountability in early childhood: No easy answers, high-stakes testing is "a failure because it ignore[s] the complexity of early childhood development, which teaches us that no single indicator can assess a child's skills, achievements, or personality." Dr. Meisels argues four reasons for not using high-stakes tests as accountability:

1. Practical problems of measurement. Most young children are developmentally not ready for test taking.
   
2. Unintended consequences. The probable result of high-stakes tests, teaching to the test, is risky in early childhood, when diversity of experience is most needed.
   
3. Opportunity to learn. Tests that ignore children's backgrounds and prior opportunities to learn can hinder programs from tailoring teaching to meet children's individual needs.
   
4. Variability and predictability. Early development is a time of extensive change, which occurs in spurts and not in a linear, predictable fashion. Long-term conclusions cannot be drawn from brief snapshots of a child's abilities.
   

Dr. Meisels recommends, instead, that program evaluations be conducted of individual early care and education providers with only a sample of children tested, to answer policymakers' questions about what is being taught, how, and how well.

The nuances between accountability, high stakes testing, and program evaluation may not matter to policymakers, however. In an era where no child is to be left behind, the more data on individual children the better, it seems. In fact, parents may be just as reliant on this data as policymakers. If your older child's progress is monitored and reported yearly, and put in context alongside his classmates' scores, you may wonder why your preschooler's progress seems to be getting less attention.

Indeed, there are no easy answers for policymakers wanting to spend public money wisely, as they are likely to be confronted with parents who want more information, educators who are divided on the benefits of testing, and taxpayers who see high price tags on nearly every option.

Parents and policymakers may disagree over child care quality

The Public Policy Forum recently surveyed 430 parents in southeastern Wisconsin. We find the vast majority are satisfied with the quality of their child care arrangements and their options for child care. In fact, most say they would not change anything about their child care arrangement if they had the chance.

This contradicts much of the research on early childhood education in our region, which has found that most providers are of mediocre quality.

The implication is that parents may be satisfied with what experts deem lower quality child care. Why? Either because they are not aware the quality is not optimal, or because they value different aspects of quality than do researchers and policymakers. The survey results indicate it is likely a little of both.

Parents are uncertain about state regulations and not very knowledgeable about child care accreditation. In addition, parents rank safety and the warmth and lovingness of a provider above the provider's skills and the learning environment, although all these facets of quality score highly among parents in our region.

We conclude that future efforts to regulate child care quality should take into account the high levels of parent satisfaction and acknowledge that, in some ways, the priorities of parents, the state, and experts in the field are not the same. While parents may seek and be most satisfied with a warm and loving caregiver, state policymakers have been considering new incentives that emphasize the educational quality of caregivers.

In addition, there were significant demographic and geographic differences among the sample with regard to the type of child care used and the affordability of care. For example, Hispanic parents were much less likely to utilize child care, and urban residents were much less likely to feel they had enough affordable child care options. Policymakers must take these differences into account and not attempt to craft a one-size-fits-all policy solution.

The full survey report is now available on our website.

Putting the private in public-private partnership

One of the questions greater public investment in early childhood education raises is whether government should play a role in the lives of most children under school age. Even for those who believe school readiness is an appropriate effort for government to fund, there is the question of how to finance that investment.

The City of Boston has grappled with these questions. In 2006 Mayor Menino asked a group of early childhood researchers and practitioners: In light of

...the stark reality that half of the test score gap at twelfth grade is attributable to gaps that exist at first grade, ...recommend steps that would yield the greatest impact on preventing and closing academic achievement gaps among children before school entry.

The resulting recommendations laid the groundwork for a new public-private partnership unveiled last week aimed at "universal school readiness" and termed Thrive in Five.

Of the $3.25 million committed to the effort, the city put up $750,000 and was joined by the United Way with $1.3 million. In addition, Children's Hospital Boston; Partners HealthCare and its founding hospitals, Brigham and Women’s and Mass. General Hospital; and the Nellie Mae Education Foundation will contribute another $1.2 million over the next three years.

According to Boston's mayor's office, Thrive in Five was developed after a year-long public and private collaboration led by the City of Boston and United Way. A 65-member School Readiness Action Planning Team was appointed by the mayor and co-chaired by the CEO of Boston's Children’s Hospital and the president of Wheelock College. Another team of 35 parents from across the city provided feedback to the larger planning team. An additional 300 Boston leaders and residents were brought into the planning process through focus groups and community meetings.

The effort is not aimed at increasing the number of children served in government-provided child care or pre-Kindergarten. It does seem to be a true public-private collaboration bringing together private early childhood education providers, hospitals, and social service agencies with public schools and libraries.

Progress will be tracked annually by measuring improvement in things such as the number of nationally accredited early childhood education programs in Boston; the percentage of new parents who are offered a newborn visit; the percentage of parents who report accessing child development information and resources; the number of children ages birth to five screened for and receiving services for developmental delays, behavior issues and environmental risk factors; and the circulation rate of picture books in the Boston Public Library system across all neighborhoods.

Unlike many other state and cities which have decided to focus only on a public schooling model for early learning, Boston's initiative focuses on the private resources already available in the city's hospitals, day cares, and non-profit service agencies. By leveraging city funds with private resources, the initiative aims to impact more children sooner and more cost-effectively than with public financing alone.

Online access to state inspections of child care providers

If you're worried about your child getting food poisoning from their favorite fast food joint, it's easy enough for citizens of southeastern Wisconsin to visit the web and get information on restaurant inspections.

If your worried about your child's health and safety when at day care, however, you're out of luck.

The results of state child care inspections and investigated complaints are not available online and can only be obtained with a special request, leaving most parents in our region in the dark.

Parents in southwestern Wisconsin have it easier. There, the Wisconsin State Journal annually reviews the child care inspection files for the providers in their region and reports which providers have been fined, and why. This year they have compiled the results from their past ten annual reviews and created an online searchable database. Since that database went live on Feb. 17, it has had more than 12,000 hits.

While a legitimate role of the media is to shed light on the workings of government, citizens should not have to rely on their local paper to provide this type of information. The purpose of government inspections of child care providers is to ensure safety and prevent fraud, to the benefit of children, parents, and taxpayers. Perhaps southwestern Wisconsin's interest in the State Journal's database will result in greater transparency for the entire state.

UPDATE: A Channel 4 News story on lack of access to child care licensing records notes the difficulty parents have in obtaining this information. The reporters were unable to get anyone from the Department of Health and Family Services to comment on the record.