Bacon's Rebellion

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Universal Pre-K: $300 Million a Year or $850 Million a Year?

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by

James A. Bacon
in

Chris Braunlich, a vice president of the Thomas Jefferson Institute for Public Policy, a regular contributor to the Bacon’s Rebellion e-zine and a candidate for the Fairfax County School board, recently issued the following statement about Gov. Timothy M. Kaine’s universal pre-k initiative. I cannot improve upon it, so I reproduce it here nearly in full.

As Governor Tim Kaine prepares to launch his program for universal preschool, it is worthwhile to underscore some of the statistics coming from a recent study by economist Robert Lynch for the Economic Policy Institute – an organization advocating universal preschool.

In his study, Dr. Lynch examined the costs and benefits of high quality preschool programs and their positive impact over time on federal and state budgets, crime costs, and earnings. Among his findings specifically for Virginia:

  • Quality universal pre-k will cost $6,000 per child. This is 20 percent higher than Governor Kaine’s estimate of $5,000, but is in line with most costs around the country. The “Start Strong Council” notes a current cost of $7,820 per child for full-time licensed child care.

  • The annual cost of a fully-phased in universal pre-k program in 2008 will be $847 million. This exceeds Governor Kaine’s projections by more than a half billion dollars.

  • It will take 11 years for the program to start paying for itself in societal benefits. These benefits include reduced crime costs, increased earnings of participating children and adults, and a greater commitment to marriage.

  • It will take 24 years for the program to pay for itself in budget benefits alone.

    • Advocates for universal preschool base their claims for a “business case” on three long-term longitudinal studies. But each of those studies involved only highly at-risk students who were massively economically disadvantaged and at risk for retarded intellectual functioning. The programs involved frequently began at four months of age and included free medical care, home visitations, health screening, speech therapy and other social services.

    To extrapolate those students and those services to the general population and assume the same benefits as justification for a universal program is disingenuous at best.

    Before the Virginia General Assembly commits to a new state entitlement program, it should carefully consider the real costs and the questionable benefits — including those costs likely to be imposed on local governments as part of the shared cost.

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    14 responses to “Universal Pre-K: $300 Million a Year or $850 Million a Year?”

    1. gold_h2o Avatar
      gold_h2o

      A few questions/comments….

      Is this a direct subsidy to the parents of pre-k kids? In other words, do they get a check or tax deduction for the cost of pre-k?

      How will this affect for-profit day care operations? In other words, how will you determine what the actual cost is? Will folks who live in urban/suburban areas get more $$ for daycare because it costs more there than in rural areas? It seems to me that the Gov’t determining the cost of a good/service is a slippery slope to be on…..for everyone involved.

      What is Universal Pre-K? Do kids learn to read, write, walk in line, etc? Is it more like school or more like day care? Can a kid be required to repeat Pre-K because they might not be “ready” for regular school?

      A LOT of questions needs to be answered if you ask me.

    2. Anonymous Avatar
      Anonymous

      “It will take 11 years for the program to start paying for itself in societal benefits. These benefits include reduced crime costs, increased earnings of participating children and adults, and a greater commitment to marriage.

      It will take 24 years for the program to pay for itself in budget benefits alone.”

      It is hard for a business to justify paybacks of less than 5 to 7 years, for some businesses it’s only three years. However, the government can afford to take a longer view of what is good for the people it serves, and it has a duty to do so.

      “To extrapolate those students and those services to the general population and assume the same benefits as justification for a universal program is disingenuous at best.”

      Right, and there is the matter of choice. We choose to commute and we choose to have children. Both of those have benefits and costs to society, but it is an open question as to what level of support the “chooser” should be able to “require” from everyone else.

      A lot of questions have to be answered, if you ask me. and answered non-politically.

      RH

    3. Toomanytaxes Avatar
      Toomanytaxes

      Watch much of the Fairfax County legislative delegation fall all over themselves to support Kaine’s proposal. It’s for the “children.” Never mind that this program would be yet another way to send Fairfax County tax dollars to Richmond and to receive pennies in return.

      The real Virginia rubes reside in NoVA. They decry the unfairness of NoVA’s relationship with Richmond, but regularly vote to make it worse.

    4. Groveton Avatar
      Groveton

      From the keyboards of TMT oft-times come gems:

      “The real Virginia rubes reside in NoVA. They decry the unfairness of NoVA’s relationship with Richmond, but regularly vote to make it worse.”.

      People sometimes type “LOL” to indicate that they have just read something that made them laugh out loud. I really did laugh out loud.

      You are so right with that comment.

      Like the kid in grade school onto whose back classmates taped a “kick me” sign we in Northern Virginia should walk around with “rob me” signed taped to our backs.

      I have talked about the abuser fee issue with dozens of well educated firends in Fairfax County. All of them were opposed to the measure. When I said, “at least the tax applies to everyone in the state and not just us” they stared at me like I had just landed from Mars.

      After a few minutes of discussion about 75% changed their minds and decided it was a good idea. The other 25% just thought the state should solve its fiscal problems by spending less.

    5. Anonymous Avatar
      Anonymous

      The federal goverment keeps a tally of which counties are receivers and which are donors. From that standpoint it is pretty clear that NOVA is a reciever.

      To then complain that much of the money they got (from someplace else and other federal taxpayers), then turns around and leaves (to someplaceelse and other state taxpayers) seems a little silly, not to say, inconsistent.

      RH

    6. Groveton Avatar
      Groveton

      Ray:

      Your post is ambiguous at best. When you say the federal government keeps a tally of which counties are receivers and whaich are donors – receivers and donors of what? Government and government related jobs?

      If that is your rather poorly worded argument then you are miles off base.

      Being paid to do a job is an honorable position whether your are being paid by Exxon Mobile, Google or a government entity. You get up every day, do your job, get your paycheck and pay your taxes. You are being paid to work.

      However, refusing to participate in effective economic development which leaves you and your community unable to pay to educate your own children is dishonorable. You have chosen to pursue an economically unviable lifestyle and you expect others to send you money not for working but just to support your lifestyle.

      If the people in the recipient counties lobbyied to get federal employment in their counties I’d give them kudos. If they got jobs working for the government, paid their taxes and could (therefore) pay for their government services – I’d be happy.

      The question, in my mind, is whether you are willing to bear the inconviences of living where the jobs are and being self-sufficient or staying where you and the last 12 generations of your family lived looking for county-level handouts.

      I have many friends in the military. They work at the Pentagon and live in Northern Virginia. They wear uniforms festooned with ribbons attesting to their bravery and service to the United States. I suppose that they don’t deserve their modest salaries because they “work for the government”.

      Try to get this straight – working for the governement is a lot different than being on the dole.

      It’s not all that hard.

    7. Groveton Avatar
      Groveton

      This seems like a legitimate issue for the 2007 elections. Let’s see what my two candidates have to say about the matter:

      Margi Vanderhye (D):

      “Revise the SOL’s to reflect our need for thinkers and test with the idea of stimulating and promoting intellectual development as opposed to rote memorization.
      Provide opportunities for small – group learning, especially in the early grades. School reorganization and planning tools are already available and in use in some schools, and we need to use them effectively.
      Include deliberate opportunities to teach personal responsibility about developing character and accountability, sound personal health and nutrition habits, tolerance for diversity, patriotism and civic engagement, and stewardship for our natural environment.
      Recruit and train the best emerging teachers in the country and pay them the competitive salaries to retain them here as dedicated professionals.
      “.

      Dave Hunt (R):

      Dave supports our schools.
      (Note: photo of children did not copy).

      Hmmmmm…..

      Jim Bacon – you are missing a great economic opportunity here. Please charge either of these two to link to your web site. All they have to add is, “I agree with Mr. Bacon” or “I disagree with Mr. Bacon”. Either way they will be saying something.

      This is sad.

    8. Jim Bacon Avatar
      Jim Bacon

      Groveton, Hmmm… expansion of another state government program. Is this another chance for RoVa to rip off NoVa? What percentage of NoVa children already go to pre-K, as compared to the percentage of RoVa children? Will Fairfax households wind up subsidizing the rest of the state for child care/educational services that they disproportionately provide for themselves? I don’t know the answer, but the question is worth asking.

    9. Groveton Avatar
      Groveton

      Jim:

      My point about Hunt and Vanderhye is that neither seems to even know this pre-K debate is going on. You should sell them your articles. They could “cut and paste” them onto their campaign web sites and appear better informed. Since NOVA politicians are almost exclusively funded by developers this would not be a state funded program but a developer funded program. Oh wait, the developers essentially own much of the state so maybe that’s the same thing.

      This will definitely be another subsidy from NOVA to RoVA. Or at least urbanizing VA to rural VA. I oppose it. Just wanted to point out that the two people running for Delagate in my district have no opinion on this matter (or on taxes in general, or on energy, or on Dominion re-regulation, or on abuser fees, etc, etc). I am hoping you will sell them some opinions so that they will at least have a few.

      You want to see a real flush of tax money?

      Read this –

      http://www.dailypress.com/news/dp-godspeedmay21,0,2276286.story?page=2&coll=dp-widget-news

      I especially like the following:

      “Anniversary costs

      The 400th anniversary has inspired major investment in events, infrastructure and marketing -amounting to more than $200 million. Here are some of the costs associated with the Jamestown 2007 commemoration:

      $31.8 million

      The cost of improvements to the Williamsburg area’s Route 199. Other transportation projects linked to the commemoration include $20 million to improve interstate rest stops throughout Virginia.

      $32M-$34M

      The Jamestown 2007 agency’s budget for events and promotions. More than half is from the state.

      $63 million

      The cost of a master plan for new facilities and other projects at Historic Jamestown, which is run by APVA Preservation Virginia and the National Parks Service. About $30 million is federal money.

      $80 million

      The cost of a state-run Jamestown-Yorktown Foundation’s multiyear plan for new buildings and other improvements at its Jamestown Settlement and Yorktown Victory Center. About 82 percent is from the state.”.

      Any idea where the ROI for this might be found?

    10. Anonymous Avatar
      Anonymous

      My comment was dashed off, poorly worded and thought out. I didn’t mean any thing about those who work for the government. I, too, work with and respect our men and women in uniform. There are many dedicated people in public service who struggle to achieve good things in spite of the restraints of the system.

      All I meant was that NOVA (and HR) is a strong recipient of government funds for government and defense. In that regard NOVA is a recieving area, and is recognized as such by the federal government. Nobody seems to complain about large areas of the country sending us money (as you correctly point out, to do work for them).

      But, when it comes time for that money to flow through the area and go back where it came from (at least at the state level), well, then that kind of redistribution is held to be unfair. (Presumably, wherever it goes, somebody there will also do work to earn it.)

      My comment wasn’t about earning money or working for the government, just a comment about the effects of redistributions.

      ——————————–

      As for looking for county handouts, that has never been my position. In fact the county freely acknowledges that I pay more than I cost, and I provide other valuable services which are unpaid. All I’m suggesting is more equity, not a handout.

      If the county thinks that their farms are so valuable, then they ought not to charge them more for less services than other citizens get. Why disincentivize them? To the extent that is happening, it is the other citizens who are on the dole, not me, working two jobs.

      If they are going to charge more for farms, then, rather than simply having a slogan about being an agriculture friendly community, and an office to print a few brochures, they ought to be more proactive in providing useful help, not at a higher level, but at a level equivalent to that which is charged extra.

      Failing that, then they ought to at least provide services or incentives equivalent to that which they provide to other sections of the community, not more, just equal.

      It’s one thing to be a donor area if you are also a receiving area, It’s something else to be a donor with nothing coming in.

      RH

    11. Groveton Avatar
      Groveton

      Ray:

      You and I certainly agree for the need to make government finances transparent. I have written the candidates for office in my district e-mails asking them to provide their positions as to whether the present tax system in Virginia is fair to Fairfax County or not. At this point I would probably vote for eaither candidate for Delagate if they answered the question in a factual manner.

      I have never personally worked for the government – any government. The last time I worked for a company on a government contract was 1987 (and that was a contract with New York City). My father retired after 20 years in the US Navy. He then spent the next 23 years working in private enterprises with no government contracts. My mother never worked for the governement nor for any comapny with government contracts. I make these points because I’d like to put to rest the belief that everybody in Fairfax County works for the governemnt or for companies that are predominately federal contractors. There are plenty of us who work in private enterprise and always have.

      However, the government does play a big role in Northern Virginia. And I know a number fo government employees (although far fewer than you’d expect given the image of Fairfax County). The government workers I know are hard working folks who earn their pay.

      I think the big question is whether the federal government should be as concentrated in the Washington, DC area as it is. The answer is, in my opinion, no. While I understand the need to have top level people in physical proximity to facilitate collaboration and to coordinate plans I question whether that same need exists as you move “down the organization chart”.Many companies have a central headquarters while managing the vast majority of their employees in places far removed from HQ. I think the federal government could do the same. Also, given the possible use of weapons of mass destruction against the US, it is probably more secure to distribute government more.

      As for the value of farms – I just don’t get it. A farm is a business. For over 100 years the basic economics of farming has been changing. Human labor has been stedily replaced by machinery running some kind of fossil fuel. Small farms have paid the price. This is unfortunate for small scale farmers just like it was unfortunate for blacksmiths when cars took the place of horses and for slide rule factories after the invention of the calculator.

      However, unless there is some trend back to economical small scale farming, it just can’t be what whole areas of the state depend upon for their wealth. Ditto for veins of coal where most of the coal has already been mined.

      Virginia needs an economic development plan that makes sense looking forward, not backward.

      I just don’t see such a plan.

    12. Anonymous Avatar
      Anonymous

      “whether the federal government should be as concentrated in the Washington, DC area as it is.”

      Yes, whether it should be is another issue, and I agree it should not be. But for the present it is, and this has repercussions on the redistribution and relocation of dollars.

      —————————

      “As for the value of farms – I just don’t get it. A farm is a business. For over 100 years the basic economics of farming has been changing.”

      I don’t get it either.

      Economically, I should get out of the farm business, along with most other farms. But the county doesn’t want me to, and won’t let me. Even if I sell, the new owner is faced with the same problem I have, which affects the price.

      Evidently, the farm is worth more to the county than it is to me or any prospective new owner. As you point out this is an economic development plan that only makes sense going backwards,unless farming dynamics change. (And they might.)

      I don’t have any problem with that plan at all: if that’s what they want, so be it. It might be dumb, it might not be economic development, but whatever it is, is what it is, and that’s the decision that has been made.

      But, if they are going to take (their) value out of the farm, then either they need to own the farm, or pay for the value received.

      That’s how you run a business, and it is how you keep businesses in business.

      Por ejemplo.

      Someone wants me to cut his field in exchange for the hay. He has no interest in the hay, but just wants his fields to look nice.

      But, for me, the value of the hay doesn’t justify the cost and risk of making it, even if I don’t have to own the land. So I tell him, I won’t cut the field for free, but I will charge him for landscaping services, and take the hay away, anyway.

      Now there is enough money to make it worthwhile. He gets what he wants, I get paid, and my customers get hay for less than what it would cost otherwise, which helps keep them in the farm business.

      It used to be that there were plenty of people that would come and cut the hay for just the hay, but there are not enough of them to go around any more. Some would even cut the hay and take only 70%. If that was still the case, I’d stop cutting my own hay. but it isn’t that way nay more.

      So that’s a farm dynamic that has changed. But on a larger scale, the county hasn’t figured out, yet, that people are not going to be willing to work for them for nothing.

    13. Groveton Avatar
      Groveton

      I don’t know much about farming so this is all very interesting to me.

      Let me start with very, very basic macroeconomics. The population of the world (and the United States) and Virginia is rising every day. All these people have to eat or they will die. Therefore, I have to assume that the demand for food is rising.

      In order to use your example, I’ll make the “non-farmer’s” assumption that hay is a necessary component of the value chain of making food. In other words, hay is a means to an end. People don’t eat hay but something else does eat hay and then people eat that something else. So, hay has value in the food chain.

      Now, the demand for food is rising and hay is a part of the food chain.

      Yet your example shows what appears to be a drop in the value of hay. Let’s hold the cost of labor constant. Let’s say it takes 100 units of labor to cut down 100 acres of hay.

      In the past, people were willing to expend the 100 units of labor in order to get 70 acres worth of hay.

      Then, people would only expend the 100 units of labor to get 100 acres of hay.

      Now, people want cash and the 100 acres of hay in order to expend 100 units of labor.

      The value of hay is falling rapidly versus the value of the labor required to cut the hay.

      This is happening even though the demand for food (which, to some extent, requires hay) is growing.

      Why?

      1. So much land has been devoted to the cultivation of hay that the supply of hay has risen faster than the demand for hay to make food. Therefore, the price of hay (relative to labor) is falling?

      2. A substitute for hay has been found within the food chain. This substitute is being used in lieu of hay thereby depressing the demand for hay even as the demand for food continues to rise?

      3. The harvesting of hay has become a technological, capital intensive business. Therefore, very large hay producers which can afford the expensive machinery needed to harvest hay at a low cost / unit are depressing the unit price of hay relative to less efficient operations which are still using less sophisticated and less expensive hay harvesting technology? In other words, the hay industry is consolidating?

      What is going on with hay?

      Whay are price4s falling?

    14. Anonymous Avatar
      Anonymous

      Well, it’s a market, like anything else.

      I recently quoted a woman my usual price for hay, and she turned me down, saying that she can buy it, delivered from upstate New York, for less than I get at the farm.

      So, I put an ad in the paper and I was inundated with calls. People were calling me at 11:30 at night.

      Obviously, the price I quoted was too low, at least locally. But, I got the hay out of the barn, and now I have room for the fall crop.

      I don’t know how that guy in Upstate New York can sell it, delevered, for $3.33 a bale. I figure the trip alone costs $1300 on the truck, leaving the hay price at $1.77 per bale. If you think he can make 15% profit, thats .265 per bale. You’d have to make a thousand bales a day in order to earn $265. The usual profit is more like half of that, I think. That’s one bale every two minutes, and then you still have to get it out of the field and into the barn. My baler makes around three to four bales a minute, when its working, but to average two a minute for a whole day would be going some.

      It’s a 3 day turnaround to make hay, one day to cut, one to dry and rake, and one to bale, so you got to cut enough to make 3000 bales to get your 1000 per day. That’s 22 acres. With really lush hay, it might be half of that, but then it takes longer to cut, longer to dry, and longer to bale, per acre.

      22 acres means you are going to drive the tractor about 28 miles at 4 mph, which is 7 hours. After you get in the field. And you gotta do that three times. 4 mph might be too fast for some fields.

      So, if you got flat fields, no gates, no fences, no obstacles to work around, no breakdowns, no rain, you don’t have to travel too far to get in the field, and you don’t eat lunch, then you can make $265 a day, at those prices.

      Which is why I have to charge more and figure out a way to sell it at a higher price (than she was willing to pay).

      It isn’t so much that farm commodity prices are falling: they have stayed pretty stable, but everything else has gone up. From 1970 to 1997 per capita American income has gone up 48%, but food expenditures increased only 23%. Americans spend only 10.7% of their income on food, comapered to 24.5% in Mexico or 14.9% in Australia.

      And a good portion of that 10.7% costs is related to dining out, distribution, etc., not actual food costs. The farmer sees only around 2% of it.

      Less than 2% of Americans live on farms and only a tiny fraction of them live on profitable farms. In 1930 you could buy a pick up truck for the price of 30 Hogs, today you would need more than 300 hogs.

      In 1930 a 3/4 of farmland was used just to feed draft animals, today, my farm friends refer to their four wheelers as “Japanese quarter horses”, an their lack of grazing means a lot of farm land is surplus. And that is before you figure the enormous increase in yields.

      I have photgraphs of hay time on the farm from around 1920. The photo shows 2 trucks, two horsedrawn hay wagons, and 10 or 12 people in the field. Now I have one person (me), and sometimes one helper, doing the same or more work. If I had 12 people, I’d be broke before lunch.

      ——————————

      To answer your question, I’d say there is more land devoted to hay, at least in our area. People with large lots are willing to have hay cut there, but they might not wish to have cultivated crops, plowing, fertilizer, pesticides, etc.

      Those same people with large lots may have horses, sheep or goats, which all consume hay. But, this situation is not conducive to the large operations you describe (and which do exist in other places). In fact, I deliberately choose smaller equipment that is easer to carry on the road, and will fit through smaller gates and the now seemingly obligatory stone farm entrance portico.

      We have, actually more than enough food to see that everyone is fed. And we have capacity for much, much more. We just don’t need it. A lot of farmers are scrambling to fill market niches, and this contributes to the overall glut, reducing prices more. It will get more profitable when we have a lot less farmers, which has been the case recently for me. (Or, if we decide the farms are valuable for other reasons, and start paying farmers for what are now unpaid services.)

      What we have is a distribution problem. I have a problem competing with hay from upstate New York. If I was growing watermelons, I’d have the same problem with fruit from Georgia.

      It is cheaper to haul stuff long distances, than it is to grow it here. We have higher land prices, and higher labor costs, because we have to compete with the urban areas for resources.

      A farm might be worth a couple or three million dollars, and be worth 30 million as a truck stop. So, it isn’t a question of farmers competing with other farmers, so much as it is a matter of competing with non-farm options.

      The bottom line right now is that if your land is worth $7000 an acre, you are better off to sell it and put the money in government bonds than to farm it. Farmland in Upstate New York and Georgia might cost less than that, but not around here.

      But, that means you have to be able, (and allowed) to sell it. No other bankrupt busieness is forbidden to sell its assets on the open market.

      RH

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