Commentary, Education, NC Budget and Tax Center

Report: Early childhood is worth the investment for N.C.

A new report from the National Institute for Early Education Research released last week confirms that North Carolina’s early childhood ambitions haven’t matched the commitment of funds needed to achieve it.

Like studies before it, the researchers find overwhelming evidence that North Carolina has designed a uniquely effective program for preparing four-year-olds for Kindergarten, 3rd-grade reading, and, indeed, life.  And yet, the ability to reach all those who would be eligible and fully realize the benefits has been arbitrarily limited by under-funding from North Carolina lawmakers.

The report finds in particular that:

  • 47 percent of eligible four-year-olds are served by the NC Pre-K Program.
  • Both urban and rural communities are not meeting the needs.
  • Funding for slots alone will not close the gaps; 44 counties declined expansion funding in recent years.

The report lists important recommendations around recognizing the full costs of delivering the program, accurately measuring county-level preschool needs, and establishing goals that push us all to commit to reaching more children.

However, certain recommendations could be improved. In suggesting changes to the reimbursement rate, the report misses the opportunity to specifically recommend the state move to a market-based analysis of the cost of early childhood programs.  Such a method would take into account the cost of additional teacher salary, facilities, and instructional materials and supports for children, rather than just utilize the cost of tuition.

In suggesting the state integrate NC Pre-K into funding formulas for K-12 public schools, the researchers fail to acknowledge the existing K-12 funding challenges in the state and the potential harm that could be done by shifting more programming needs onto a funding formula and system that is substantially underfunded.

But the report’s largest oversight is ignoring the key piece in the puzzle explaining why our early childhood programs continue to struggle to be accessible, equitable, and high quality. State policymakers continue to prioritize wasteful tax cuts for wealthy North Carolinians and corporations over proven investments in early childhood programs. These tax cuts have reduced state revenue by $3.5 billion per year.

North Carolina could easily meet all of the report’s goals if state lawmakers prioritized early childhood over tax cuts for big companies and wealthy taxpayers. The roughly $530 million needed to get the program to full enrollment could be raised if incomes over $1 million were taxed at 7 percent – a rate that would still leave their taxes lower than they were in 2013. Alternatively, a similar amount could be generated by taxing corporate profits at rates similar to South Carolina’s 5 percent.

As the CEOs who sponsored the launch of the report recognize, early childhood is worth the investment.  What better way to start to apply the findings of the report than for them to publicly call for corporate and income tax rates that would enable our state to give every four-year-old the opportunity to thrive?

Alexandra Forter Sirota is the director of the N.C. Justice Center’s Budget & Tax Center. 

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