Published Online: June 28, 2006

Report Urges Business Groups to Advocate for High-Quality Preschool Programs

A national organization of business leaders is calling for universal, high-quality preschool for all children, an expensive initiative that would cost at least $16 billion but is a price the Committee for Economic Development declares states and the federal government must pay.

In a new 74-page report released today, the Washington-based business public policy group maintains that costly academic-remediation programs are draining state and federal budgets, when money would be better spent getting 3- and 4-year-olds ready to learn. The result, the report says, would boost the nation’s economy and deliver returns of at least between $2 and $4 for every dollar states and the federal government invest. The role for businesses, according to the report, is to push states to fund these preschool programs.

“The business community has recognized that investing in quality pre-K not only benefits young children’s education, it makes smart fiscal sense for our states and our nation,” Susan K. Urahn, the director of state policy initiatives for The Pew Charitable Trusts, said in a statement. Pew provided funding for the report, titled The Economic Promise of Investing in High-Quality Preschool: Using Early Education to Improve Economic Growth and the Fiscal Sustainability of States and the Nation.

The benefits of widespread preschool would come in four categories: health, crime, education, and tax revenue, according to the report. The report contends that when quality preschool is available, schools save money because students are better prepared and are less likely to repeat a grade, while their teachers are happier and less likely to quit. Students who attend preschool are less likely to drop out later in their school careers, are more successful academically over the long term, and are less likely to commit crimes or need public health and welfare assistance, it adds. What’s more, the report says, parents who can send their children to high-quality preschool are more likely to work outside of the home, thus paying more income taxes to federal and state governments.

Expensive Proposition

But not just any preschool program will get these kinds of results, the report states, because quality is the key to success. Preschool programs must be run by well-trained and well-paid teachers, feature an age-appropriate curriculum, have low child-teacher ratios with at least one teacher for every 10 children, and last for 15 to 30 hours per week.

That’s an expensive proposition. The report estimates such a program will require between $16 billion and $27 billion in new funding—without taking revenue from other education programs. The report offers no clear answer for how to pay for such a program, but suggests using traditional methods, such as state income, sales, and other taxes.

States could also turn to “sin” taxes and ask smokers and alcohol consumers to pay more, according to the report. Or, it adds, local school districts could create new preschool programs by using existing federal grants and lobbying for new aid. The report outlines some alternative funding ideas, such as asking parents to share the cost of their child’s program (if they can afford it), establishing an endowment with public funds, or issuing education loans to parents.

The report states that a high-quality program will cost about $5,100 per child. During the 2004-05 school year, states spent about $2.8 billion on preschool. According to the report, only six states spent more than $5,100 per child on preschool: Connecticut, Delaware, Minnesota, New Jersey, Ohio, and Oregon.

Vol. 25

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