March 1st State Budget Update

March 1, 2017

As you already know, Governor Kasich introduced his state operating budget for FY 2018-19 last month and it is currently receiving hearings in the Ohio House of Representatives (House Bill 49).  The legislature and advocates alike have been analyzing the text as the House Finance Committee and the various subcommittees invited testimony from state agencies.  Groundwork continues to review the Governor’s proposals to identify the bill’s level of commitment to the early care and education of our youngest Ohioans.  The budget detailed "red book" for the Ohio Department of Job and Family Services has yet to be made available and the "red book" for the Ohio Department of Education was just released this week. Below are our preliminary findings:
 

The Ohio Department of Education maintains flat funding for early childhood education programs for low-income children in FY 2018 and FY 2019.

 

The funding, totaling $75.3 million each fiscal year, funds up to 18,465 preschool slots with the state funding allocation of $4,000 per child. Of the total preschool slots funded, up to 17,215 (93.2%) are supported by GRF line item 200408, Early Childhood Education, in ODE's budget and 1,250 (6.8%) are supported by casino operator settlement fund moneys appropriated in Fund 5KT0 line item 600696, Early Childhood Education, in the Ohio Department of Job and Family Services (ODJFS) budget. FY 2017 marked the first year that casino operator settlement fund moneys have been used to fund early childhood education grants.

 

The executive budget permits ODE to use a portion of GRF line item 200408 to establish a new pilot program that would allocate preschool slots to low-income parents rather than to providers. If established, ODE expects to operate the pilot program in two to three areas around the state. The award amount is expected to be $4,000 per child, the same as the existing early childhood education grant program. While ODE currently does not have an estimate of the amount of funding to be allocated for the pilot program, the number of existing, filled preschool slots may not need to be reduced to accommodate it. The pilot program is a response to some preschool slots going unfilled due partly to the time needed to adjust to a programmatic change made in H.B. 64.


Beginning in FY 2017, H.B. 64 limited program eligibility to four-year-old children only instead of both three and four-year-olds. In an effort to increase utilization, ODE worked with providers having unfilled slots and reallocated about 1,000 open slots in December to providers that, through an ODE canvass, expressed interest in and capacity for additional slots. As of January 2017, early childhood education programs had filled 81%, or about 14,956, of the total slots funded for FY 2017. The executive budget continues to require the development of joint processes between the ODJFS-administered Publicly Funded Child Care Program, and ODE's Early Childhood Education Program in the areas of program eligibility determinations, applications, attendance tracking, and alignment of copays.
 

ODE's Superintendent Paulo DeMaria, did offer testimony before the house on February 7th which highlighted the Department's maintenance of early childhood education investments in addition to outlining plans to better align services with ODJFS to make Ohio's cross-agency system work more efficiently.  ODJFS has not yet had the same opportunity to testify, although we expect testimony from the Department next week.  Despite not having further detail, it is Groundwork's understanding that ODJFS has also flat funded its early care and education investments at $143,436,793 in both FY18 and FY19 as reflected in GRF line item 600535.

 

As part of Ohio’s Race to the Top− Early Learning Challenge Grant, 100% of licensed childcare providers in Ohio serving children who receive Publicly Funded Child Care (PFCC) subsidies must be Star Rated in the Step Up to Quality five-star quality rating and improvement system by 2020. As of 2015, only 35% of licensed childcare centers, 26% of Type A, and 3% of Type B home providers are Star Rated*.

 

Ohio statute, R.C. 5104.29(G)(1)(a-e) also mandates that 100% of licensed providers (excluding Type B) that serve PFCC children should be high-quality (3 to 5 Stars) by 2025. In order to reach this goal, the following thresholds must be met:

  • By June 30, 2017, 25%

  • By June 30, 2019, 40%

  • By June 30, 2021, 60%

  • By June 30, 2023, 80%

  • By June 30, 2025, 100%

As of 2015, only 15% of licensed childcare centers and 5% of Type A home providers are high-quality (Percentages include providers that only serve school-age children). 
 

Given that funding across the board has remained flat, Groundwork is concerned that progress towards these goals is not being adequately achieved. Many questions remain as Groundwork keeps a critical eye towards achieving and sustaining equal access to a quality early care and development system for our most vulnerable Ohio kids.

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