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Investing in Child Care

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Occupancy costs are second largest budget item. ... Executive Partnership,Colorado Educare, Kansas City Ready for School partnership. ... – PowerPoint PPT presentation

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Title: Investing in Child Care


1
Investing in Child Care
  • Why Employers Should Support Publicly-Funded
    Child Care
  • Louise Stoney
  • Alliance for Early Childhood Finance
  • ABC Webcast
  • February 11, 2003

2
Child care is many things
  • Child care centers
  • Family child care homes
  • Head Start public prekindergarten
  • School-age child care recreation
  • Summer camps
  • Informal care (relatives, friends and
    neighbors)
  • Parental leave
  • Flex-time other family friendly policies

3
Child care programs provide early education
  • Children dont wait until school starts to begin
    learning...

4
Child care is important because...
  • Your future employees are enrolled in child care
    today.
  • Many of your current employees rely on child care
    so they can work.
  • Supporting child care is good business.
  • The economic viability of our communities -- and
    the country as a whole -- is strengthened by the
    child care industry.

5
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6
It doesnt make sense.How could child care
possibly cost more than college?
  • Good question -- and you are right. It doesnt
    cost more to provide early education than higher
    education. But the price is higher. Why?
  • College education is heavily subsidized. Colleges
    have access to a host of revenue sources. As a
    result, tuition revenues cover only a small
    percentage of the total cost.
  • Child care, on the other had, has almost no
    direct subsidies. Tuition is the primary -- and
    sometimes the only -- revenue source.

7
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8
Factors that drive child care costs
  • Staff to child ratios are mandated.
  • Personnel costs are the largest item in a budget
    (often 70 ) and wages are already too low.
  • Occupancy costs are second largest budget item.
  • Centers are very small -- almost no economies of
    scale.

9
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10
Key points
  • The private sector cant bail government out.
    Even if private funds increased four-fold they
    would still represent a small slice of the
    overall child care finance pie.
  • Government funds are largely targeted to
    low-income families, and are paid to child care
    providers in lieu of parent fees. Thus, they
    dont help the bottom line.
  • Still, publicly-funded child care scholarships
    are an important support for some
    industries--especially services and retail trade.

11
Families who receive public child care subsidies
are clustered in the services retail trade
industries
12
A Case for Action
In most states, the services retail trade
sectors are leading job growth
Georgia Industry Employment Growth,1996-2006
Percentage Change
Construction
Finance, Insurance, Real Estate
Transportation
Services
Agriculture, Forestry, Fishing
Wholesale Trade
Communications, Public Utilities
Retail Trade
Source Occupational Outlook, 1996-2006
13
Child care supports economic development
  • A healthy economy requires strong businesses and
    productive workers. Child care not only fuels
    that strength, it's an industry that provides
    positive, short term returns.
  • While typically not viewed as such, child care
    businesses comprise a rapidly growing industry
    that contributes a significant amount of economic
    activity by developing jobs, generating tax
    dollars, and pumping money into local economies
    through the purchase of goods and services.
  • Just as roads, airports, and bridges enable
    people to get to work and businesses to get their
    supplies, child care enables parents to work.

14
The child care industry contributes to the economy
  • In Kansas, the child care industry employs more
    people than important industries like hotels,
    farm machinery and oil bearing crops.
  • In Milwaukee, Wisconsin, the child care industry
    generates almost 204 million in gross
    receipts--more than spectator sports, hotels,
    engineering firms.
  • In San Antonio, Texas, every 1 invested in child
    care returns 1.46 to the city in additional tax
    revenue.
  • In Tompkins County, New York, every 1 spent on
    publicly funded child care scholarships returns
    as much as 3.60 to the local economy.

15
The bottom line If we separate
employer-supported child care and publicly-funded
child care strategies, we are missing the boat.
  • For businesses that hire lower-wage workers,
    publicly-funded child care is an important
    employer support.
  • And for businesses that hire moderate and
    middle-income families, the lack of public
    support for child care is not only a serious
    problem, its a missed economic opportunity.

16
So.what can be done about this?
  • Child care needs more broad-based public funding
    (in other words, not just funds for poor
    families).
  • Child care needs new, innovative financing
    strategies that involve strategic alliances among
    the public and private sectors.
  • Child care providers need new fiscal and
    management approaches that promote stability and
    economies of scale.

17
What companies can do
  • Spearhead new partnerships that leverage public
    and private funds for child care. Examples the
    Florida Executive Partnership,Colorado Educare,
    Kansas City Ready for School partnership.
  • Support public child care funding. Examples
    Florida An Hour a Week for Kids initiative,
    Massachusetts Early Education for All campaign,
    National Corporate Voices for Working Families
    and Committee for Economic Development.

18
What companies can do
  • Help craft new financing strategies that build on
    successful models from other fields. Examples
    innovative use of tax policy, like Oregons new
    child care investment tax credit or Colorados
    proposal for a new school-readiness tax credit.
  • Encourage state community economic development
    agencies to work with the child care industry.
    Examples Maine Business Commission, California
    LINCC projects.
  • Help the child care industry craft new fiscal and
    administrative strategies to reach economies of
    scale.
  • Maybe add something from NC? Ask Abby, Anne,
    others...

19
What companies can do
  • Help the child care industry craft new fiscal and
    administrative strategies that can stabilize the
    industry and allow these small businesses to
    reach some economies of scale.
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