A recent report by the Buffett Institute tracks how much money is spent on early childhood in Nebraska and where it comes from, and also calculates what it would cost to fully fund Nebraska's early care and education system.
By Matthew Hansen, Managing Editor
A state lawmaker, a researcher, and a half-dozen other business and education leaders sat on hard chairs inside a university conference room, having a collective Eureka moment that could eventually help change the way we fund early childhood education in Nebraska and the United States.
Cathey Huddleston-Casas, the researcher, told the group assembled at her table about her desire to identify the gap between what we currently spend on early childhood, and what we must spend to offer quality early care and education to every Nebraska family.
Sen. John Stinner perked up. Yes, yes, said the Republican from Gering and chair of the Nebraska Legislature’s powerful Appropriations Committee during a 2018 meeting of the Nebraska Early Childhood Workforce Commission. That is what I need to know. How much do we spend now? How much do we need to spend, and from what sources? Give me that number. I need that number.
The eight members of the 40-person commission seated around the table that morning realized: We need to know this. We can know this. And learning precisely how and where we spend money now – and how we need to spend it in the future – could help light a new path for early childhood.
“We left that meeting knowing, OK, we need to get some serious info,” says Huddleston-Casas, the Buffett Early Childhood Institute’s associate director of workforce planning and development. “So we got to work.”
As COVID-19 jolts the country awake to the need for better child care, and as a new Biden administration plan to spend billions to improve our faltering early care and education takes shape, many U.S. states face this new reality in near-total darkness.
States don’t always know how much money is coming in or exactly how it filters through the early childhood system. They don’t have a good estimate for how much money they need to deliver quality care and education to every child, or how to spend in order to achieve that goal.
But Nebraska has a flashlight. The state’s funding reality, and a potential path forward, are illuminated thanks to the work of the researcher, a policy analyst, and state leaders who encouraged it.
Huddleston-Casas and Jen Goettemoeller, a longtime early childhood policy analyst, spent nearly a year digging deep into federal and state budgets, tracking and mapping the byzantine ways that money flows from D.C. and Lincoln to child care providers in places like Omaha and Ord and O’Neill. They built on previous work done by and for the state of Nebraska, updated it, and added their own expertise.
The result: A report that allows us to know exactly how many public dollars we spend on early childhood in Nebraska, and where all that money comes from (Read the technical report here).
Huddleston-Casas also calculated the gap between that number and what it would cost to fully fund Nebraska’s early care and education system, using modeling estimates from a blue-ribbon national report.
Together, these efforts give Nebraska lawmakers and experts their clearest-ever look at current funding streams. It illustrates the multi-agency, multi-level funding messiness that can unintentionally make it harder for child care providers to access available funds.
It clears the way for more work: How might Nebraska invest new money to forever alter the early childhood care and education system. How might we do this instead of spending funds on a current system that many experts, providers, and parents believe was flawed long before COVID-19 exposed those flaws?
And this work in Nebraska also provides a model to other states, something that can be replicated across the U.S. as we try to move from a frustrating present for American child care into a better future.
“There haven’t been a lot of states who have done real thinking about this,” says Simon Workman, an early childhood funding expert and consultant who formerly served as the director for early childhood policy at the Center for American Progress. “Putting the governance piece together with the finance piece is really the sweet spot. And it’s something that Nebraska is leading on, to be quite honest.”
Huddleston-Casas and Goettemoeller’s work, which built on research done earlier in the state, showed that nearly $138 million in federal funding and nearly $77 million in state funding came into the state’s early child care and education system in 2017.
They also illustrated that $211 million in government funding comes from 13 separate state and federal funding streams. The pair started to track the money as it ran through the system, drawing arrows and boxes and more arrows on a dry-erase wall in the Buffett Institute office, as that money flowed from a federal agency, to a state agency, to another state agency and sometimes another before finally reaching a child care provider. By the time they were done “we were standing on top of the ladder because we needed the very top of the wall,” Huddleston-Casas says. “The whole wall was filled.”
Some of these funding mechanisms make sense, the researcher and the policy analyst say, especially when money is designated and delivered for specific populations for specific reasons.
But the overall effect often confuses and burdens child care providers, who spend valuable time and energy they can’t spare filling out paperwork and trying to understand the complicated funding system.
“The providers and the families are really at the mercy of what the government does or doesn’t do on this front,” says Goettemoeller. “They can’t fix it themselves…it’s really the leadership at the state level that can make this a better functioning system.”
After mapping the $211 million federal and state money, Huddleston-Casas calculated that $248 million in private money—mostly family payments to providers— also flows into the system.
That means that, in 2017, we spent roughly $459.6 million on early care and education in Nebraska.
Roughly 16% of that total funding for early care and education comes from state coffers, a markedly smaller slice than for K-12 education.
The $459 million total is also not nearly enough to adequately fund early care and education in Nebraska. But how much is enough?
To answer this question, Huddleston-Casas used a national model for full, quality early childhood funding from the National Academies of Sciences, Engineering, and Medicine and applied it to Nebraska. After weeks more of work, she had her answer: Nebraska needs $911.9 million to fully fund a quality early childhood system.
Put simply: We’re currently half-funding our early care and education system.
The researcher then sketched potential paths that the state can take to get to full funding by the year 2030. She proposed a phased, blended approach that couples higher federal and state contributions, a larger amount of money from business and philanthropy, and an increased amount of money as more parents enter the child care system.
There was some worry that releasing the full funding price tag would cause sticker shock, the researcher and policy analyst say, particularly if state lawmakers focused on the total instead of the various ways Nebraska could reach full funding. Members of the Nebraska Early Childhood Workforce Commission, a group of more than 40 experts, civic leaders and policymakers, urged the work on. Go big or go home, said one member at a commission meeting, prompting laughter but also agreement.
Stinner, chair of the Appropriations Committee, was thrilled to receive the report, because it answered questions he had asked at that 2018 meeting, Huddleston-Casas says. The state lawmaker got to work, adding $5 million additional dollars to fund early childhood and working with others to unlock more federal relief money as it arrives in Nebraska.
Stinner and a bipartisan group of state leaders are also promoting a new way to think about early childhood’s role in Nebraska. Quality early childhood care and education is economically essential, they argue, and its expansion is desperately needed if we want to keep employees productive, employers satisfied, and grow the state economy.
Crucially, Huddleston-Casas’ and Goettemoeller’s report was authored before a global pandemic pushed a staggering number of child care providers to the brink of closure while revealing the importance of child care as parents struggled to work from home and others struggled to find care for their children.
The federal government under both the Trump and Biden administrations has injected billions into the reeling early childhood care and education system. And Biden’s proposed American Families Plan calls for billions more in funding that could stabilize and grow child care and early childhood education in the years to come.
In 2021, there may be more focus on and potential funding for early childhood than ever before.
“The hope and the challenge have shifted,” says Workman, the co-founder and principal of Prenatal to Five Fiscal Strategies. “Now the hope and the challenge are really to figure out how this new funding could be used most effectively.”
The researcher and the policy analyst hope their work will be used to build something better in Nebraska.
They have both spent decades studying and working with Nebraska’s current child care system—a system in which providers often make poverty-level wages while caring for children whose parents can barely afford the sky-high cost of care.
“If we’re going to get money to stabilize early care and education, we need to recognize that the system we have wasn’t stable before COVID,” Huddleston-Casas says.
Their desire, and the desire of the Nebraska Early Childhood Workforce Commission, is that new money is invested in sustainable change. The sort of change that would allow child care providers to get paid a fair wage and would reduce rampant employee turnover that hurts both child care businesses and families. Change that would enable families to be able to afford quality early childhood care and education, no matter their income level. Change that would make parents of young children more productive members of the workforce while offering their children the type of early brain development that sets them up for success in life.
There’s still a lot of work to be done, the researcher and the policy analyst think. But in Nebraska, that work has begun.
“This funding report isn’t just useful. It’s absolutely essential,” Goettemoeller says. “There is no way we can move towards the systems-level change we want to see without this very, very foundational starting point.
“This isn’t the end. This is the very first step.”
Matthew Hansen, the managing editor of the Buffett Early Childhood Institute at the University of Nebraska, is an award-winning journalist tasked with telling the stories of the Institute's work and early childhood care and education in Nebraska and beyond.
His columns can be read at https://buffettinstitute.nebraska.edu/news-and-events/early-years-matter.