Government agencies give lip service to the importance of high-quality child care and early learning programs, but the patchwork system of tax breaks and government grants has too many gaps, causing many families to struggle with bills. And many communities have too few options for high-quality early learning opportunities. That was the consensus of a panel of experts who spoke at the Education Writers Association’s early childhood conference Nov. 6 and 7.
They debated however, the causes of and potential fixes to the problems – ranging from taxes to grants to privatization.
Tax Breaks Improve Costs But Not Quality
The federal tax system “is where most families will be touched by subsidies,” according to Elaine Maag, from the Urban-Brookings Tax Policy Center. Forty percent of federal dollars that are spent on children come through the federal income tax system, Maag said. That percentage will most likely increase if congressional Republicans are successful in passing an overhaul of the tax system.
But the tax system doesn’t help with larger issues surrounding early childhood education, said Libby Doggett, a consultant and former Deputy Assistant Secretary for Policy and Early Learning for the U.S. Department of Education.
“My major concern is the tax system does not help us build an early learning system,” Doggett said. “We know [early childhood education] has to be paid for. The child care tax credits are not going to do that. It’s going to be funding for programs and standards that we’re now requiring programs to meet.”
The tax system is meant to subsidize care in a variety of ways, according to Maag. This is done through tax credits including the earned-income tax credit, which Maag called the “largest antipoverty program,” the child tax credit, and the child and dependent care tax credit. These programs don’t reach all parents, however, and the credit for child care costs, in particular, is “inadequate for many families,” Maag said. Center-based infant care can cost as much as $17,000 a year in states like Massachusetts.
Families also can use flexible spending accounts for children under the age of 13, but it only allows families to set aside $500 a year and a small number of employers offer it, according to Maag. This program only impacts people who owe taxes — most likely not low-income people.
If the tax system is overhauled, families could see some changes, including an increase in the child tax credit from $1,000 to $1,600. Flexible spending accounts may be eliminated by tax reforms.
Government Grants Aren’t Meeting Demand
Outside of the tax system, funding for early childhood care and education mostly comes from funding for Head Start, state-funded pre-K grants, the Child Care and Development Block Grant, and some Title I funding, said Doggett. Parents also receive subsidies for child care for their children through Temporary Assistance for Needy Families and the Social Services Block grant, according to the nonprofit Child Care Aware.
But current federal funding is inadequate, Doggett said, which leads many programs to “braid” funding together from various sources to support their work.
“We’ve got to pay for quality,” Doggett said. “We’ve got to make sure our federal funding and state funding are going to quality programming.”
Is Privatization the Problem or a Solution?
Lindsey Burke, of The Heritage Foundation, said the “braided situation” is unnecessary and due to a “labyrinthian framework at the federal level” for early learning programs. Ideally, Burke said, there would be fewer federal programs and less involvement by the federal government.
“Our preference has been to actually streamline that a little bit,” Burke said. ”Consolidate those programs and maybe give the state an option on how they spend those early learning program [funds].” And if states do fund early learning, Burke said it should be done in a way that does not “crowd out the private provision of care.”
Doggett disagreed that federal funding should not be involved in early learning programs, and said that for years the early childhood education system has been left to the private market. That is “not doing us any good,” Doggett added, “because we have too many children who are entering school way way behind.”