Chairman Grosso and members of the Committee on Education, thank you for the opportunity to speak today. My name is Ed Lazere, and I am the Executive Director at the DC Fiscal Policy Institute. DCFPI is a non-profit organization that promotes opportunity and widespread prosperity for all residents of the District of Columbia through thoughtful policy solutions.
DCFPI is glad to see the District’s demonstrated commitment to the essential work of improving early education. We are pleased that there have already been a number of bills introduced this year aiming to better the education of our youngest residents. In particular, we’d like to thank the Chairman for his bill to expand the definition of ‘at-risk’ children to include pre-K students in community-based settings.
Access to high-quality, affordable early learning can reduce the achievement gap that begins before children even reach a pre-K classroom, and relieve working parents. Yet many providers who participate in DC’s child care subsidy program struggle to maintain quality while serving our most vulnerable children, largely due to the District’s low reimbursement rates, which do not match the actual costs of providing care. Last year, DCFPI was encouraged by the fact that the Council put $1.8 million towards aligning the reimbursement rate for toddlers with that of infants, since the required staff ratios are the same. We urge the Office of the State Superintendent to distribute these funds to providers as soon as possible, and backdate them appropriately to October 1, 2016.
However, more is needed to improve early education in the District. I’d like to focus my testimony today on the following areas within the Office of the State Superintendent of Education (OSSE): protecting key investments in early childhood education by increasing the child care subsidy reimbursement rates to sufficiently cover the cost of care for infants and toddlers, and expanding early intervention services for young children to identify and address young children with developmental delays.
I also would like to share some information on the need for transportation subsidies for adult learners in the District. My colleague Ilana Boivie will cover this issue in more detail at the performance oversight hearing for the Deputy Mayor for Education.
Protect Key Investments in Early Childhood Education
Low-income families can qualify for financial assistance from the government to help offset the costs of child care while they are pursuing work, education, or training opportunities. The centers and homes that provide care for these families are then reimbursed by the government at certain rates, based on the age of the child, the type of setting, and quality tier of the provider.
Child care providers who participate in DC’s child care subsidy program struggle to maintain quality while serving our youngest children, largely due to the District’s low reimbursement rates. The District should increase the rates to better match actual costs of providing care, particularly for infants and toddlers. A 2016 report by the DC Fiscal Policy Institute and DC Appleseed found a 30-34 percent gap between the median cost of providing care to infants and toddlers and the subsidy program’s payments to high-quality providers. We also found that providers in many neighborhoods rely heavily on the subsidy program, as families in their neighborhood cannot pay market rate tuition.
As a result, many centers that serve mostly low-income children, and rely mostly on the child care subsidy program, struggle to provide quality care and make ends meet due to low reimbursement rates. Nearly half of the providers in our study’s sample operated at a loss in the year we studied, with deficits ranging from 4 percent to 63 percent of their total revenue. Many reported paying staff low wages and making sacrifices to maintain their level of quality, including into personal debt to float their center’s operations. Providers serving our most vulnerable children should not have to be forced to choose between paying staff a competitive wage and covering the cost of caring for a child whose family cannot afford to pay.
The research shows a real need to invest strategically in the city’s early care and education centers and homes to build more sustainable business models for delivering high quality care. Our research suggested that an increase of 43 percent, or $38 million, in the subsidy payment rates for infants and toddlers in gold centers is needed to help cover the gap between subsidy payments and the true cost of serving infants and toddlers. This increased investment could be phased in over a three-year period to align with changes currently being made to the Quality Rating and Improvement System which may affect the cost of care. This year, we recommend that Council budget $13 million to invest in closing the gap. We also recommend the District implement differentiated subsidy rates to help meet the need – for example, higher rates of reimbursement for operating programs in neighborhoods with the highest poverty rates or for serving children with special needs.
Expansion of Early Intervention Services for Young Children
The earlier that a child is evaluated and a disability or developmental delay is identified, the sooner they are able to receive the services they require. The Enhanced Special Education Services Act of 2014 expanded eligibility criteria to include children demonstrating a developmental delay of 25 percent in at least one area (rather than a 50 percent developmental delay in one area or 25 percent in two areas). This expansion could make 1,200 more children eligible for services, based on the percentage of population that Maryland serves with 25 percent delay eligibility criteria, according to the bill’s Fiscal Impact Statement (FIS).
Unfortunately, this expansion is not yet funded. The FY 2017 budget added $4.6 million more towards early intervention services, but only to restore a cut and serve all eligible children under the prior, less inclusive standards. That was not sufficient to fund the expanded services. Additional funding is needed to expand the DC Early Intervention Program/Strong Start next year.
Research and logic tell us that early identification of disabilities in children can lead to better academic and behavioral outcomes and lessen future costs to the city and society. Low-income children may have the most to gain from early identification, since children living at or below the poverty line are more than twice as likely to be at high risk for developmental delays (19 percent) as their peers living at more than twice the poverty line (seven percent).
High quality special education services at an early age can change a child’s developmental trajectory, reducing educational costs in the future by minimizing the need for subsequent special education services. According to a RAND study on the benefits of early childhood interventions, the returns to society for each dollar invested are estimated anywhere from $1.80 to $17.07, with savings coming from grade retention, special education placement, high school graduation rates, and labor market outcomes. We recommend the Council and OSSE prioritize the funding of this early intervention expansion.
Adult Learners Would Benefit from Access to Transportation Subsidies
DCFPI is an active member of the DC Adult and Family Literacy Coalition. Adult learners who receive services from AFLC providers have cited the high cost of transportation as a significant issue for several years now. For example:
- In the fall of 2015, DC AFLC, in conjunction with the Fair Budget Coalition, hosted learner listening sessions, and heard that the cost of transportation is one of the biggest barriers to learners attending and remaining in educational programs.
- In the spring of 2016, DC AFLC members surveyed nearly 1,000 adult learners to better understand how transportation presents a barrier to them. Over a third of adult learners reported their biggest concern was regarding the cost of transportation, and that the high cost can prevent them from attending school.
A recent report from the DME recommends “expand[ing] the unlimited bus and rail component of the School Transit Subsidy program to all District residents enrolled in a publicly funded adult education program.” The DME report found that to serve the 7,494 students enrolled in community-based organizations (CBOs), UDC’s Workforce Development and Lifelong Learning programs (WDLL), and adult charter and alternative education schools who are not currently receiving assistance through Kids Ride Free, the government would have to pay somewhere between $1.5 and $2 million dollars a year.
Unlike students through age 22—who do not have to pay to ride Metro rail and bus because they are enrolled in the Kids Ride Free program—students over age 22 currently pay the full price, which poses a significant financial burden that often threatens an individual’s success in adult education programming. Without the ability to afford to commute to school, residents can be stuck in an endless cycle of enrolling and stopping out. Removing the barrier of the cost of transportation will make it easier for adults to remain in school until they achieve their educational and employment goals and give them greater access to jobs from which they’ve been previously shut out.
Thank you again for the opportunity to testify. I am happy to answer any questions.
 Judy Berman, Soumya Bhat, and Amber Rieke, “Solid Footing: Reinforcing the Early Care and Education Economy for Infants and Toddlers in DC,” DC Appleseed and DC Fiscal Policy Institute, March 2016. https://www.dcfpi.org/solid-footing-reinforcing-the-early-care-and-education-economy-for-infants-and-toddlers-in-dc
 Child Trends, “Screening and Risk of Developmental Delay,” http://www.childtrends.org/?indicators=screening-and-risk-for-developmental-delay.
 Lynn A. Karoly, M. Rebecca Kilburn, Jill Cannon, RAND, “Proven Benefits of Early Childhood Interventions,” http://www.rand.org/pubs/research_briefs/RB9145.html