Cutting Early Childhood Programs Worsens Fiscal Problems

States can save money and stimulate their economies, in the short and long run, by protecting funding for effective pre-kindergarten and home visiting programs, according to a new issue brief by the Partnership for America's Economic Success.  “The Costs of Disinvestment” provides evidence for why states cannot afford to cut early childhood programs whose demonstrated economic and societal benefits reduce taxpayer costs now and generate more revenue in the future.  Rigorous science and hard data show that these investments are fundamental to achieving a globally competitive workforce and fiscal sustainability for states and the nation. 

“Reducing budgets for proven early childhood policies means health, education and social services costs will rise,” said Sara Watson, the Partnership's director and senior officer at the Pew Center on The States.  “The fiscally wise choice is to maintain quality home visiting and pre-k investments.  These policies are steps toward short-term savings for states and produce high rates of return on each public dollar by stimulating consumer and business spending.” 

The brief highlights how public funding for evidence-based home visiting and early learning benefits taxpayers as soon as a year after children and families have received services.  Voluntary home visiting programs serving pregnant women can help decrease by half the incidence of low-birthweight births, each of which adds between $28,000 and $40,000 in costs.  Pre-k programs can quickly reduce the number of children with developmental delays or held back in the early grades.  A study of New Jersey's Abbott Preschool Program found 30 percent less grade retention in first grade among children who attended one year and up to 50 percent less for those who attended at both ages 3 and 4; each child held back costs the state $16,000 per year. 

The brief also provides evidence that early childhood programs act as an economic stimulus.  Because child care and pre-k professionals tend to spend much of their earnings locally, their jobs cause wage dollars to move multiple times through their communities.  Facilities maintenance and supplies for early childhood programs are heavily local, spurring spending when and where it is most needed.  Also, parents whose children are in reliable, quality care are able to work more productively and rely less on public assistance, while parents out of work can better search for jobs and participate in training programs.  Such public investments can help attract new business by signaling the state's commitment to workforce development.

The Partnership for America's Economic Success is a national coalition of business executives, economists, funders and civic leaders mobilizing business to improve tomorrow's economy through smart policy investments in young children today. It is managed by the Pew Center on the States and funded by Robert Dugger, the George Gund Foundation, John D. and Catherine T. MacArthur Foundation, Ohio Children's Foundation, The Pew Charitable Trusts and Scholastic, Inc.