Chairman Grosso and members of the Committee on Education, thank you for the opportunity to testify today. My name is Marlana Wallace, and I am the Policy Analyst at the DC Fiscal Policy Institute focused on education finance. DCFPI is a non-profit organization that promotes opportunity and widespread prosperity for all residents of the District of Columbia through thoughtful policy solutions.
The DC Fiscal Policy Institute is a member of the Birth-to-Three Policy Alliance, which includes DC’s leading children’s policy, advocacy, and service nonprofits. We know that investments in young children can have big payoffs, and that they are good for our economy. We know, based on the science of brain development, that the early years are crucial to the long-term health, learning, and future success of children.
I am here today to speak to the importance of investing in quality early education for low-income infants and toddlers, as well as implementing the early intervention expansion for children with disabilities.
I would also like to share some information on the need for transportation subsidies for adult learners in the District. My colleague Ed Lazere also covered this issue at the performance oversight hearing for the Deputy Mayor for Education.
I would like to commend the Council and the Mayor for the proposed bills and initiatives to improve child care facilities, achieve better funding equity for three and four year-olds across sectors, and expand the supply of seats for families who can afford to pay market-rate prices.
At the same time, the proposed 2018 budget does not include essential funding increases to improve the quality of care for the District’s youngest and most vulnerable, low-income learners.
DCFPI is thankful to this committee and the full Council for adding $1.8 million to the child care subsidy program in 2017. Along with many partners, we encourage the Council to add $13 million in FY 2018 as part of a three-year effort to address the $38 million needed to ensure that providers can provide high-quality care, as identified in a 2016 report by DCFPI and DC Appleseed.
Early Care and Education
Quality early education is a smart investment in the future success of young children, and particularly so for low-income infants and toddlers. Access to high-quality, affordable early learning can reduce the achievement gap that begins before three years old, before children even enter a preschool classroom. Children who receive quality care also grow up to earn more money as adults.[i]
The Mayor’s “My Child Care DC” initiative invests $14 million in the expansion of child care facilities which is expected to create 1,300 market-rate new seats, to the relief of many working parents. Importantly, the initiative also dedicates $1.19 million to help 300 current and aspiring early learning educators attain the higher credentials required by rising standards.
Yet, the ‘My Child Care DC’ initiative reflects a missed opportunity to work towards the Mayor’s stated goal of “inclusive prosperity,” by not making parallel investments in the child care subsidy program to improve the quality of affordable care for low-income children.
Many community based organizations who participate in the District’s child care subsidy program struggle to maintain quality while serving the most vulnerable children, largely due to the District’s low reimbursement rates. Our 2016 analysis with DC Appleseed identified a $38 million gap between current funding and the cost of providing high-quality care in gold-rated centers. Gold-rated centers are reimbursed for $63 a day for infant care, but the median cost of that care is $89 a day, so providers are losing $26 dollars a day for each low-income infant they care for.
Providers struggle to make up that difference. Some providers go into personal debt to float the Center’s operations, others turn away young families who rely on the subsidy, and many simply cannot scrape together the resources to earn higher quality ratings. These challenges are particularly pronounced for providers located in low-income neighborhoods, where most families do not have incomes that allow them to pay private rates, and providers are taking a loss on nearly every child.
Almost all community based providers are forced to pay their educators less than they deserve. The quality of teaching dramatically affects outcomes for students, and yet the average child care worker in DC makes only $26,900, which contributes to stress and a high turn-over rate in the workforce.
To address these issues DCFPI and a number of partners urge the Council to:
- Increase Outdated Child Care Subsidy Rates by at Least $13 Million
We urge the Council to invest $13 million this year in raising the reimbursement rates for providers who care for low-income infants and toddlers. Community-based providers can then invest these additional funds in taking steps to earn higher quality ratings, attracting and retaining good teachers, and better serving the young children in their care.
- Give Higher Subsidy Payments to Providers in Low-Income Neighborhoods
The Council should instruct OSSE to adjust reimbursement rates and direct more resources towards providers located in the areas of highest need who are serving the most vulnerable children, so they have the means to meet the same standards of quality elsewhere in the city.
- Develop Deliberate Strategies to Raise Compensation for Teachers
Raising reimbursement rates will cover costs that already exist at the current level of wages. But in order to attract and keep our best teachers, we need to increase the respect they’re given, along with the wages and benefits they’re paid. Teachers in community-based organizations are paid much less than public school teachers, and they work year-round with fewer benefits. Standards of quality should incorporate a competitive salary scale, alongside commensurate funding.
Early Intervention Expansion
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.
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. 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. The returns to society for each dollar invested in early intervention are estimated to be anywhere from $1.80 to $17.07, with savings coming from grade retention, special education placement, high school graduation rates, and labor market outcomes.
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).
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). Unfortunately, as of today, it has not yet been funded.
Expanding early intervention criteria would bring the District’s practices in line with national best practices and DC’s as-yet unfunded 2014 legislation to identify and address delays sooner. DCFPI is encouraged that OSSE has indicated that they will be able to implement the expansion in the last quarter of FY 18 under the proposed budget. However, the budget shows no increase in early intervention funding, and funding for the expansion is not specifically designated as a line item. OSSE has suggested that they can implement the changes at the end of 2018 by re-arranging current funding. While we are excited that OSSE wants to move forward, we are concerned that this will not support the expansion in 2019 and beyond. In particular, we remain concerned that the 2014 legislation calling for this essential expansion remains subject to appropriations. We urge the Council to update the Fiscal Impact Statement and allocate the funding needed for full fidelity of implementation. Families have already been waiting for 3 years since the law was passed. They should not have to wait any longer.
Adult Learners Would Benefit from Access to Transportation Subsidies
DC residents who try to improve their job prospects by participating in adult education programs find that transportation costs—usually bus fare—often keep them from completing their programs and fulfilling their goals. Transportation assistance would improve the outcomes of the city’s substantial investments in adult education and strengthen the DC economy by helping more residents live up to their potential.
A recent report from the Deputy Mayor for Education 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 these 7,500 students, the government would have to pay somewhere between $1.5 and $2 million dollars a year.
In February, legislation was introduced to provide free public transportation for adults in education programs, based on the recommendations of the DME report. We are pleased to see that a majority of Councilmembers support the Adult Learners Transit Subsidy Amendment Act of 2017. DCFPI hopes that this bill is fully funded and incorporated into the FY 2018 budget, so that this important program can be implemented as quickly as possible.
The Right Priorities
We believe that funding the child care subsidy program, the early intervention expansion and transportation subsidies for adult learners should be a priority. The needs are well-documented and the outcomes for DC residents and the economy are clear. If the DC Council cannot find other ways to fund this investment, the Council should delay or eliminate the $40 million in estate and business tax cuts slated for 2018. DC’s business income taxes are already aligned with Maryland and Virginia, so lowering them will do little to attract thriving businesses, especially compared to investing in an educated workforce. Eliminating taxes on estates worth up to $5.5 million will do little to attract or retain those few eligible families, whereas quality, affordable early education will improve the lives of hundreds.
Thank you again for the opportunity to testify.
[i] Heckman, James, “Lifecycle Benefits,” https://heckmanequation.org/resource/research-summary-lifecycle-benefits-influential-early-childhood-program/
 Lynn A. Karoly, M. Rebecca Kilburn, Jill Cannon, RAND, “Proven Benefits of Early Childhood Interventions,” http://www.rand.org/pubs/research_briefs/RB9145.html
 Child Trends, “Screening and Risk of Developmental Delay,” http://www.childtrends.org/?indicators=screening-and-risk-for-developmental-delay.
 OSSE Responses to Fiscal Year 2018 Budget Oversight Questions, April 18, 2017, Q. 11.
 OSSE Budget – E803 – It appears from the budget book there is a $ 940,000 increase in the Office of Early Intervention. We have been advised that was an error and there is no actual increase. Presentation by Superintendent Kang at OSSE budget briefing, April 20, 2017.
 OSSE Responses to Fiscal Year 2018 Budget Oversight Questions, April 18, 2017, Q. 11.
 Deputy Mayor of Education, “The Need for Transportation Subsidies and Assistance for Adult Learners Report” http://lims.dccouncil.us/Download/36809/RC21-0140-Introduction.pdf