A Fragmented Non-System: Highlighting the Lack of Sustainable Funding for ECE in America

Elaine Hudson was growing desperate.

For months, her high-schooler, Matt, had been on the waiting list at five high schools that participated in the city’s subsidized high school program: one that was housed in spare classrooms at the local community college, two that were run by community organizations that also provided various other services for families and seniors, one in the basement of a church, and a small high school in the proprietor’s home that had room for only six students.

In theory, any child of high school age was eligible for the city’s program, but there was never enough funding to meet more than half the demand for high school seats. And with the start of the school year rapidly approaching, Elaine still hadn’t found a spot for Matt.

If Matt didn’t get in to a high school somewhere, she would have to either leave him with his grandparents, which meant a 35-minute drive each way, or quit her job to teach him algebra and world history at home. She certainly couldn’t afford a fancy private high school on her salary as a nursing assistant—it was hard enough to pay for the subsidized high school program, which, despite the city’s contribution, still cost her $100 a week. And even if Matt did get in to one of the high schools she’d applied to, transportation would still be a problem. She and Matt lived in what experts call a “high school desert,” and none of the schools was nearby.

Meanwhile, at the Open Door Community Action Agency, which housed one of the high schools where Matt was on the waiting list, Janet Perez, the executive director, was going through a stack of bills and financial statements and wondering how much longer her organization could afford to keep the school open.

The high school sector had been hit hard by the COVID-19 pandemic, and Open Door had just received the last installment of federal funds allocated by Congress three years earlier to help prop up struggling high schools. They’d used those funds to boost the salaries of teachers who had been scraping by on the near-poverty wages that were all Open Door could afford to pay them. When the COVID funds dried up, Perez would have to cut her teachers’ pay, and she fully expected that, in an economy with a 3.9 percent unemployment rate, many of them would quit for better-paying jobs. Even fast-food workers were making more money than most high school teachers.

What’s more, Open Doors’ classroom building was in need of repairs. They’d applied for a regional grant that would fund the renovations they needed, but there was no guarantee they would get it—the grants were highly competitive. If they couldn’t update the building, they might lose their license to run a high school. Other grants were available for other needs through various state and federal programs that came and went, and Perez spent much of her time on the applications, hoping that some of them would pay off.

Perez was thankful that the city had decided to subsidize high schools in an effort to make sure that more young people got a secondary education—which she knew is especially important, given the spurt of brain development that takes place during adolescence. Previously, only a quarter of the city’s kids had gone to high school. That figure was now 50 percent—not great, but certainly a whole lot better than before. Still, Perez had to contend with the fact that the subsidies, which were calculated by market rate—essentially, what struggling parents could afford to pay rather than the actual cost of providing a high-quality high school education—were grossly inadequate. She could see the writing on the wall: Open Doors’ high school would likely cease to be financially viable within the year.

As you’ve probably guessed by now, the Hudsons, Janet Perez, and Open Door aren’t real, and high schools in the United States aren’t facing the kind of desperate situation we’ve described above. We invented them to contrast our country’s approach to K-12 schools with its lack of commitment to early education and care, which includes what people call child care, preschool, and prekindergarten.

In reality, in most of the United States, communities invest in public school buildings that have room for all high-school age young people, and they at least adequately fund the administration, data systems, and supplies necessary to run those schools. K-12 schools generally have stable funding through local property taxes, with some help from state and federal programs that are also relatively stable. Parents don’t have to pay anything to send their kids to a public high school, and high school teachers earn an average annual wage significantly higher than the U.S. median.

None of that is true in early education and care, a fragmented non-system that has been mired in perpetual crisis for decades now. The situation we described above is everyday reality when it comes to the education of our country’s youngest children.

While virtually every high-school age student in the United States is guaranteed a free public school education, the demand for early education and care vastly exceeds the supply. Until their children go to kindergarten, parents like Elaine Hudson have to scramble. When they do find a spot for their children, it’s almost never free, and young families are hard pressed to afford the price tag. According to government data, the average cost of child care in the United States is $10,900 per child per year, or 15 percent of the median family income. In many states and cities, families either pay more, pay a greater percentage of the median income, or both—for example, $17,600 per child annually in Washington, D.C. (20 percent of median family income there), $14,200 in Vermont (21 percent), and $11,400 in Oregon (16 percent). If a family can’t handle the cost, one parent, usually the mother, may have to leave the workforce and stay home, interrupting her career and drastically reducing the family’s income.

For children from birth to age five—the years before kindergarten—we invest less in education than we do at any other stage of life, including not just K-12 but also higher education. Yet these children are going through the most important and fastest period of brain development that they’ll ever experience, a time when high-quality early education and care can significantly boost their chances for success both in school and in life.

Across the country, the early education non-system is weak in every area that we take for granted in K-12, for example, physical infrastructure, administrative oversight, and data systems for tracking children’s progress and their transitions from one type of care to another. Above all, early education and care lacks the kind of sustainable financial model that makes K-12 schools a public good rather than a private expense to be borne by families.

It doesn’t have to be this way.

The American Rescue Act, passed in 2020 in response to the economic devastation of the Covid-19 pandemic, included $24 billion in vital stabilization funding for early education and care—an unprecedented federal investment in the field. This provided a ray of hope that Congress was beginning to recognize the dire need for a better way to pay for early education. Indeed, the Biden administration pushed for continued investment in early education in its Build Back Better initiative. Congress’s failure to approve these funds was a crushing blow, one that’s reverberating through the early education sector as programs are being forced to cut wages, scale back their offerings, and, like the fictional Janet Perez, consider whether they can remain financially viable. In the end, many will close their doors.

In the meantime, some states are stepping up.

In New Mexico, for example, decades of activism finally paid off in 2022 when more than 70 percent of voters approved a ballot measure that created a constitutional right to early education in the state. To pay for early education, as well as other programs such as home visits to new parents, New Mexico can now draw about $150 million annually from the state’s sovereign wealth fund, which is built mostly on oil and gas revenues.

And in Vermont, once again following a long campaign of grassroots activism that created support across the political spectrum, the Legislature overrode the governor’s veto to institute a 0.44 percent payroll tax (0.33 percent from employers and 0.11 percent from their workers) to make child care more consistent and affordable across the state. Beginning this year, the tax will provide about $125 million annually, considerably easing the burden on Vermont families.

Yet these successes highlight how much remains to be done. The level of public investment in early education and care varies widely from state to state and city to city. In most places it’s inadequate at best, and nowhere does it match the level of per-student investment in K-12 schools. Without stable, sustainable funding sufficient to create the infrastructure for a true system of high-quality early education and care, the United States will continue to fail its youngest citizens and their families.