A Quality Preschool Mixed Delivery System That Meets The Needs Of New Jersey Children, Families, Providers, Staff And Taxpayers

Safe and accessible childcare options are needed now more than ever to ensure our state’s children are well cared for and that all parents, particularly mothers, have the opportunity to participate in a strong, diversified workforce. Families, government officials and the childcare industry have all acknowledged that more must be done to support and grow this critical industry that serves as a backbone to our economy. As the state’s private and non-profit childcare providers, we are offering policy makers an outline of critical steps that must be taken to sustain and grow the childcare infrastructure necessary to support New Jersey’s working families. 

The provision of universal preschool (UPK) was first put forward by the New Jersey Supreme Court in Abbott v. Burke in 1990. This landmark decision stated that to mitigate disparities in education between wealthy and poor school districts, preschool education was to be provided to three- and four-year-old children in the neediest school districts. The court ordered the State to create a universal preschool system in the New Jersey’s 31 neediest school districts. 

Over time, decision makers saw the need to expand these programs to more school districts. The net result of this UPK expansion: 156 school districts with more than 55,000 preschoolers being served at $924 million. The true cost of UPK in New Jersey is estimated at $2.6 billion, including salaries, pension, and healthcare benefits to teachers, as well as additional infrastructure. 

Beyond the high cost, the model has caused multiple problems for New Jersey’s for-profit and not-for-profit childcare providers, many of which were exacerbated by the COVID pandemic. For example, many New Jersey school buildings are not safe from environmental contaminants, impacting the development of very young children. From an economic perspective, the removal of three- and four-year-old children from licensed, community-based, private childcare centers not only destabilizes those centers’ budgets, impacting their ability to provide infant and toddler care, but it jeopardizes the survival of the business as a whole. 

The pandemic also intensified the complexities of managing a family which relies on two incomes. The need for continuous full-day, full-year childcare, or early morning and evening caregivers was pronounced. 

The pandemic continues to cause staff shortages that disproportionately impact working women and the childcare industry, of which 97% of all employees and employers are women. In fact, in May and June of 2020, one out of four women who became unemployed nationwide during the pandemic reported that the job loss was due to a lack of childcare, twice the rate of men (Source: NJBIA Childcare Access Paper). Nationally, nearly 1.8 million women dropped out of the workforce because of the pandemic. As a result, women’s labor participation is currently at the lowest point in 30 years. (Source: NJBIA Childcare Access Paper). 

From a childcare employer perspective, recruiting and maintaining staff has also become increasingly difficult. According to the United States Department of Labor, the childcare sector 

laid off or furloughed 373,000 employees, or 36% of its workforce, at the height of the pandemic because of government-mandated center closures. Today, only about 70% of those jobs have been filled. By contrast, the economy overall has recovered 78% of the jobs wiped out in the spring of 2020, and restaurants and bars – which lost nearly half their workforce – recouped 84% of those positions. (Article: Crisis Level: Child Care providers grapple with a worker shortage as federal relief is slow to help). 

Given the experience and lessons outlined above, a coalition of interested parties including for-profit and not-for-profit childcare providers, the business community and federal childcare industry advocates is working to find ways to strengthen private childcare. 

The Coalition is recommending that the Legislature propose a reworked preschool funding model as part of the School Funding Formula. That may include potential legislation creating a new entity to manage all aspects of the provision of programs and services to students under six years of age. This solution would address the whole ecosystem, not just quality education. It would focus on the health and safety of the child and the financial stability of women, families, and the entire childcare industry. 

GOALS: Impact upcoming School Funding Reform Act (SFRA) negotiations and future revision(s) expected in the 2022-2023 Legislative Session by ensuring: 

1. A mixed delivery system incorporating private and non-profit childcare centers into the provision of preschool education to three-and four-year-old children, which gives families choice regardless of residence. 

2. Government funding follows the neediest children to the most appropriate placements based on the needs of the child and the family. 

3. Stability of the economic health of licensed, community-based childcare centers so that the provision of infant and toddler care is not impacted by moving three- and four-year-old children to preschool classrooms in public school buildings. 

4. Environmental safeguards for all children under the age of 6 years old by mandating equal operating requirements for public and private facilities. 

5. Woman-owned and operated community-based childcare centers and the women employed in these centers are properly compensated. 

1. I. MIXED DELIVERY SYSTEM 

The best model for preschool comes from states using a variety of settings, such as community-based licensed childcare facilities, school-based programs, Head Start, and licensed/registered family daycare centers. A mixed delivery system provides choice, so families are not burdened with issues impacting their ability to work or care for their children. A mixed delivery system is also more cost efficient, especially when taxpayer dollars are used. Examples of these state models can be found in Colorado and Georgia. 

Supporting Documentation: 

- “Solutions to Achieve a More Equitable and Sustainable Early Care and Education System” (July 2021 Boston Consulting Group) 

- “Can the U.S. Create Universal Pre-K without Repeating Past Mistakes?” (WFAE/NPR release dated October 3, 2021) 

- ECEC’s overview about a mixed delivery system 

1. II. SERVING THE NEEDIEST CHILDREN 

As stated in our introduction, New Jersey’s plan for UPK had a well-intentioned start when the NJ Supreme Court’s Abbott v. Burke decision mandated that NJ’s 31 neediest school districts offer preschool education with certified teachers, limits on class size, and two years of full-day instruction. Fast forward to 2022, the original mandate for a small subset of students in a small subset of districts has now ballooned to 156 school districts, more than 55,000 students and a huge, growing line item in the state’s budget. The state investment to date equals $924 million in UPK. Ultimately, the true cost to the public sector will be $2.6 billion per year. This figure does not include the additional cost to the state pension system or health care premiums. 

1. III. ECONOMIC HEALTH OF THE CHILDCARE INDUSTRY DEPENDS ON THREE- AND FOUR-YEAR-OLDS & FAMILY FLEXIBILITY AND CHOICE 

The impact is not just financial. The movement of preschool-aged children from community-based settings to public-school settings impacts infant and toddler care. A community-based center cannot just serve the zero- to two-year-old population and financially survive. Childcare center budgeting is predicated on having three- and four-year-old classrooms where there are 10 three-year-olds per staff member or 12 four-year-olds. This offsets the high cost of infant and toddler care in which ratios are 1:4 for infants and 1:6 for toddlers. A study by the Center for New York City Affairs at the New School found that from 2014 to 2019 the number of four-year-olds enrolled at subsidized childcare centers contracted with the city dropped 25%. This critical drop correlated with a drop of 2,700 seats for children under the age of three. Without three- and four-year-old classrooms, centers will be forced to close, therefore further impacting the availability of quality infant and toddler care. 

The cost of living in New Jersey is infamously among the highest in the nation. Often, middle-class families need two incomes to support the household. This is not possible unless childcare is both available and affordable. As stated in the attached documentation, quality community-based childcare provides a full day of programs and services, a full calendar year of programs and services, and choice of provider location. Sometimes a chosen childcare center is near work, sometimes it is near home or near another caregiver. Having a choice in providers enables the family to select a center based on what is best for its unique situation, and geographic flexibility also affords parents more opportunity for education or career advancements. 

Preschool offered in the public schools is a limited day with a limited calendar year. It requires families to secure options for before, after and summer care. Often these options are not in a licensed setting conducive to the growth of very young children. Conversely, when a child is placed in a licensed childcare center, he or she has a full, continuous day without interruption of program, services, and care. This continuity not only helps the child developmentally, but it also helps families meet their financial and personal needs/schedules, creating a more peaceful, healthy environment with fewer transitions. 

Supporting Documentation: 

- EDA submission 

- WFAE/NPR Article 

- ECEA Position Paper 

- Video: “The right direction mixed delivery of early care and education” 

- Boston Consulting Group Report 

- NJBIA Fact Sheet 

- Two percent Profit model paper 

1. IV. STAFFING SHORTAGES/IMPACT ON WOMAN EMPLOYEES AND BUSINESS OWNERS 

Childcare is an issue long overlooked by policymakers and could hold the state — and nation — back from a full economic recovery after the coronavirus pandemic. An October 2021 Household Pulse Survey from the U.S. Census Bureau revealed that almost 8 million adults are still not working, or are working reduced hours, because they are caring for children not in school or daycare. Making matter worse, childcare providers across the state are facing a dire staffing shortage, intensified by the pandemic, which could further derail the state’s recovery as offices continue to reopen, school-aged children are back in full-time, in-person school, and parents are expected back in the office. 

The conditions impacting childcare centers throughout the state will have a far-reaching impact on working parents, employers, and all residents unless sweeping action is taken. Many childcare workers – similar to other minimum wage workers in restaurants and public works – have no choice but to leave the industry for steadier and higher-paying work, as the pandemic has prompted a labor reckoning for countless people. 

With the lingering pandemic and constant uncertainty from UPK expansion, childcare workers can find better pay and benefits at large retailer stores. With so much restriction over the past 18 months many centers were already struggling to match minimum wage, which will continue to rise over the next few years. (It is currently $13 an hour in New Jersey, but will increase to $15 an hour for most workers in 2024.) 

Furthermore, caregiving primarily falls on women’s shoulders, and the pandemic has already disproportionately impacted their employment. Nearly two million American women left the workforce entirely during the pandemic, largely because schools and daycares shut down. 

The employment shortage has a direct impact on both childcare providers and their workforce. As directors struggle to staff their centers, some childcare providers are forced to decrease operating hours and the number of available spots for children. At the same time, some workers are retiring early, while others are transitioning into other, higher-paying sectors, like retail, or adjacent jobs, like public education. The net result is that all businesses across the State whose employees rely heavily on childcare are in jeopardy of seeing negative ripple effects on their workforces. 

Supporting Documentation: 

- Star Ledger article “Child Care shortage threatens to stall New Jersey Recovery and working Parents’ Plan 

- Crisis Level: Child Care Providers Grapple with a worker shortage as federal relief is slow to help 

- NJ.com article – “NJ got $694 million to help childcare centers. It hasn’t doled out the money” 

- NJBIA Fact Sheet 

- NJEDA Submission 

V. ENVIRONMENTAL SAFETY IN LICENSED CHILDCARE CENTERS VS. PUBLIC SCHOOL BUILDINGS 

The first area of concern for all decisionmakers should not be the quality of preschool education. Rather, it should be “where” the education is being provided. Ensuring healthy environments free from toxins, airborne disease and other factors that may impact the physical, mental, and emotional growth of a child should be top priority. The reason: placing a very young child in an environment with lead and other toxins is a known cause of developmental delays. New Jersey tackled this issue for the childcare industry in 2007 with the passage of the “Madden Law.” This law required that both the entire interior and all contiguous exterior property of a licensed childcare center be free from harmful toxins. Now, New Jersey’s childcare centers are among the safest in the nation, while unfortunately, the Madden Law did not apply to public school preschool classrooms. Given that the average age of a school building in New Jersey is 68 years old and many do not have proper air ventilation, decisionmakers should be concerned that these very young children are being exposed to dangerous and unsafe environments that are not developmentally appropriate for three- and four-year-olds. For this reason, the very first policy consideration should be the “health” of the environment where programs and services are provided for educational and enrichment purposes. 

Supporting Documentation: 

- Madden law 

- ECEA environmental paper 

- EDA submission 

FINAL CONSIDERATION: New Jersey’s funding for preschool education, childcare services, early intervention and children in poverty all flows from separate state departments including: the Department of Education, the Department of Children and Families, the Department of Health and the Department of Human Services. As it relates to the regulation of care and schooling of the under-six-year-old population, the Department of Children and Families (licensing and regulation), the Department of Community Affairs (building codes and enforcement), the Department of Health (air quality), the Department of Environmental Protection (surface, water and environmental fitness), the Department of Education (preschool programming through the public schools) and the Department of Human Services (Division of Family Development) are all involved in this sector. 

For this reason, New Jersey should house preschool education in a stand-alone authority, office, or department so that funding streams can be braided together and the administration and regulation of programs and services for this population are coordinated and seamless. This is a model used effectively in Colorado and Georgia. This streamlined approach with no wasteful duplications or overreaching arch from one or more departments will provide the best path forward for managing early childhood care. 

End 

WORKING GROUP MEMBERS: 

ECEA 

ECEC (Early Care and Education Consortium – national non-profit alliance of the leading multi-state/multi-site childcare providers, key state childcare associations, and premier educational service providers) 

NJ Business and Industry Association 

NJ Chamber of Commerce 

NJ YMCA State Alliance 

Saxson Environmental 

WORKING GROUP CONSULTANTS: 

Porzio Governmental Affairs