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Philadelphia Inquirer - March 24, 2016

Diminishing revenue not best way to fund pre-K

Making it easier for parents to find quality pre-kindergarten programs for their children makes sense for Philadelphia. But it’s an arduous, expensive task that won’t immediately make the city more attractive to families or to businesses looking for the best environment for their employees. For that to happen, more must be invested in higher grades too.

Mayor Kinney’s commission on universal pre-K issued a draft report last month that said only a third of the city’s 42,500 pre-school-age children “have access to high-quality, publicly funded pre-K.” The report doesn’t say how many children have the financial means to enroll in non-publicly funded pre-K. But maybe that will be part of the commission’s final report, which is expected in April.

Meanwhile, more information can be found in an analysis by the Reinvestment Fund, which says it will make $7.6 million in loans at below-market rates to help child care centers expand their facilities. The study said the demand for child-care seats in Philadelphia is “slightly greater” than the supply. It put demand at 108,700 seats and the supply at 101,500.

The study also counted pre-K programs considered “high-quality” under the Keystone STARS rating system, which Kenney wants to use. You need three or four stars to be ranked as a high-quality provider, which requires meeting rigorous staffing and academic standards.

Only about 70,000 pre-K seats available in Philadelphia are at child care centers participating in the voluntary Keystone STARS program, and only about 14,600 of those seats are at high-quality facilities, according to the Reinvestment Fund analysis. About 31,000 seats are at centers with one or two stars, while 24,400 are at centers with no stars at all.

Acquiring stars takes time. The Chinatown Learning Center has four stars now, but had only two stars 10 years ago. It was aided by participation in the United Way’s Success By 6 program, which provides consultants who help pre-K providers improve their learning environments. Since its inception in 2007, Success By 6 has helped 205 out of 330 child care centers achieve three- or four-star status.

Acquiring stars also takes money. Many child care centers pay less than the minimum $11.94 an hour that the city requires any company or agency funded by it to pay employees. Low salaries typically lead to frequent staff changes as workers chase higher pay. That disrupts the continuity in teaching that pre-K providers must have to improve their Keystone STARS rating.

The William Penn Foundation is giving the city a $15 million grant, but, like the Reinvestment Fund’s loans, that money is to help providers make capital improvements to their facilities. Kenney wants to impose a 3-cents-a-bottle sugary drink tax that he believes would raise about $95 million a year, with $60 million going to his pre-K expansion program.

The health benefits of drinking fewer sodas aren’t being touted as loudly as when Kenney, as a councilman, helped defeat Mayor Michael Nutter’s soda-tax proposal in 2011. But quietly making that argument is new city Health Commissioner Thomas Farley, who as New York’s health commissioner helped lead a failed effort to impose a penny-per-ounce tax on sugary drinks in that city.

Supporters of Kenney’s tax say if it passes poor communities will benefit doubly by having better child care and losing weight. It’s true that obesity is a problem in poorer neighborhoods, but it’s not limited to them. Poor families shouldn’t be stereotyped to make the case for a soda tax. Many try to provide nutritious meals, but are limited not only by income but the absence of conveniently located groceries with healthier food choices

It should also be noted that the Reinvestment Fund study concluded that affluent areas of the city, including Chestnut Hill, have higher shortages of high-quality child-care providers than poor areas.

If the tax passes, poor families will spend a higher percentage of their incomes than affluent families to buy sodas in the city. But in addition to being regressive, it’s a tax of diminishing returns. City officials say soda sales may drop as much as 55 percent in the first year after the tax goes into effect, but only 1 percent a year thereafter. If pre-K is important — and it is — why fund it with revenue that’s expected to decrease every year?

A 7.75 percent property tax increase would also generate about $95 million annually and, according to city revenue officials, would cost the owner of a $130,000 house only about $140 a year in additional taxes. That route makes more sense to fund pre-K, but it’s a tougher sale politically. Philadelphia property taxes have risen more than 20 percent since 2010, which includes the effects of the Actual Value Initiative initiated by Nutter in 2013.

Kenney and Council members may have the courage to take on soda distributors and grocery operators to get a beverage tax passed. And it may not bother them much that the soda tax is regressive. But the thought of imposing another property-tax hike strikes fear in their hearts. It’s the kind of fear that prevents them from seeing that building the type of educational environment that makes Philadelphia the envy of America would be well worth the cost.

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