Item 5: Children's Funding Project presentation — original pdf

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Strategies for Local Investment in Early Child Care Margo Kinneberg (United Way) on behalf of the Children’s Funding Project Work Group Austin Early Education Council • March 2024 Agenda 1 1. About the Children’s Funding Project Cohort 2. Additional Background 3. The Case for an Investment in Early Child Care 4. Policy Proposal: Four Investment Strategies 5. Cost of Implementation 6. Administration and Governance 7. Next Steps Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 About the Children’s Funding Project Cohort 2 • CFP is a national nonprofit that helps communities expand equitable opportunities for children and youth through strategic public financing. • 17+ months in a cohort of municipalities nation -wide • Austin Work Group comprises members of City and County agencies, elected officials and their staff, WFS Capital Area, United Way for Greater Austin, and additional child care stakeholders Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Additional Background 3 • 35+ years of community engagement Success by 6 Coalition, Austin Early Childhood Council • Lessons learned from the pandemic and ARPA investments • Urban Institute study on nontraditional hour care and subsequent pilot • CFP Cost Modeling Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 The Case for a Significant Investment in Child Care 4 • Workforce • Affordability • Accessibility • School Readiness • Market Failure • Equity • Social Returns “The business model for child care, which is a market-based system, is broken.[….] Bottom line – it is almost impossible to deliver sustainable, high-quality, full-day, year-round child care for infants and toddlers at a price that families can afford or are willing to pay.” - “Child Care and Economic Development,” TXP, Inc. (Dec 2023) Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Recommended Investment Strategies 5 We propose four strategies to stabilize the industry and increase access to affordable, high quality child care for families in our community: 1. Subsidize birth through age 3 contracted slots 2. Expand nontraditional hour care 3. Build quality and capacity 4. Create a business-government alliance Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Strategy One: Subsidize Birth through 3 Contracted Slots 6 • What are contracted slots? Guaranteed capacity • P a y for the true cos t of qua lity ca re . $20/hr minimum wage, full benefits • Why focus on 0 through 3? Best for brain development, most underserved, biggest market failure, worsening situation Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Strategy Two: Expand Nontraditional Hour Care 7 • NTH care is provided during early mornings and evenings, overnight, or during weekends when standard child care programs are closed • Austin’s supply of NTH care serves only 25% of need • NTH care would benefit children of all age groups from families of all income levels Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Strategy Three: Build Quality and Capacity 8 Four tactics: 1. Shared services (“hubs ”) – expand current ARPA-funded efforts 2. Child care workforce capacity building – expand current efforts 3. Training and quality for family -based programs – expand current efforts & adopt innovative new programs 4. “Gap funding” & the importa nce of working with, not a ga ins t, WFS – make WFS rates more competitive Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Strategy Four: Create a Business-Government Alliance 9 • Incentivize businesses to contribute to the cost of child care for employees by matching public funds to employer contributions, up to • Adapt Michigan and Kentucky models and Proposed Texas HB 3771 50% tuition cost models Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Cost of Implementation 10 We recommend holding a Tax Ratification Election (TRE) in November of 2024 to fund our proposed strategies Strategy Estimated Cost ($Millions) City / County Birth Through Three Contracted Slots Scholarship/Subsidies 25 / 34.8 Expand Nontraditional Hour Care 5.8 / 6.4 Build Quality and Capacity Create a Business-Government Alliance 6.4 / 8.3 4.2 / 4.9 Governance, Administration, and Evaluation 5 / 6.5 TRE Projections for FY25 (City / County) These projections are estimates based on numbers provided by City and County staff to date FY25 Property Tax Rate Increase Projected FY25 Property Tax Revenue Projected FY25 Typical Homeowner Annual Impact Projected FY25 Typical Homeowner Monthly Impact ($) 0.02 0.03 ($ millions) 49.4 / 61.4 ($) 87.92 / 97.91 ($) 7.33 / 8.16 74.1 / 92.1 131.87 / 146.86 10.99 / 12.24 Total 46.4 / 60.9 Note: Budget reduced by 28.3% if only City of Austin - $38.5 M Preliminary - subject to community input, refined budgets Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Significant Local Impact if Passed 11 • Job creation and economic development (3551 City, 4559 County) • Improved quality of life (income uplift; over 40K families impacted over 12 years) • Stronger businesses (reduced turnover and absenteeism) • Long -term social returns Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Administration and Governance 12 ● Administering body to distribute funds and implement programs (e.g. HHS) ● Oversight body empowered with accountability and quality assurance tools (e.g. Commissioner’s Court) ● Advisory board composed of local experts, providers, and parents ● Regular independent evaluations and a timeline for reauthorization ● A 10% cap on administrative costs Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024 Discussion 13 Strategies for Local Investment in Early Child Care Children’s Funding Project Work Group | 2024