| October 4, 2011

Let’s Diversify Our Preschool Portfolio

Proponents of prekindergarten (pre-K) believe that children need to be institutionally prepared for kindergarten. For example, there are curricula such as “READY! for Kindergarten” that set reading, math, and emotional targets for children starting as early as age one.1 Pre-K proponents at the Annie E. Casey Foundation state:

Children must be ready to succeed when they get to school before they can learn there. They also need to be present at school—attending regularly—because they can’t learn if they aren’t there. And they need to have high quality learning opportunities, beginning at birth and continuing in school and during out-of-school time, including summers in order to sustain learning gains and not lose ground. For millions of American children, these conditions are not met. For low-income children in particular, a “readiness gap” fuels much of what has become known as the achievement gap.2

To that end, in 1998 Oklahoma policymakers began the nation’s second pre-K program. Today, it is the largest pre-K system in the country, with over 98 percent of Oklahoma’s school districts offering a pre-K program and 71 percent of all four-year-olds in attendance.3

Targeting low-income children in their youngest years to increase the probability that they will succeed in the later school years is the basic premise of the public pre-K initiative. However, as shown in Chart 1, of all the poor children under the age of 18, only 38.2 percent are under the age of 6, which is below the national average of 40.1 percent. Therefore, relative to the rest of the country, Oklahoma has less need for pre-K than other states.

Yet since 2003, Oklahoma has ranked first in the nation for serving the highest percentage of four-year-olds in its state-funded preschool program. The state channels aid to local school districts, which are free to run full-day programs, half-day programs, or both. The overall cost of providing public pre-K is high and growing.

In 2010, total state pre-K spending was $167,245,396 for 37,356 children, for an average cost of $4,477. As shown in Chart 2, the per-child cost of pre-K has soared in recent years. Between 2002 and 2010, the per-child cost of pre-K has grown 34 percent to $4,477 in 2010 from $3,343 in 2002. Not only has the cost per child soared, but enrollment as a percent of all four-year-olds has jumped to 71 percent in 2010 from 56 percent in 2002—an increase of 15 percentage points.

Overall, combined federal, state, and local spending per child in 2010 for pre-K was $7,855. This rivals the combined federal, state, and local per-child spending for the entire K-12 system of $8,865.

In addition to these pre-K costs, in 2006 Oklahoma launched the Pilot Early Childhood Program available year-round to at-risk children from birth to age three. Enrollment has expanded every year since, and now serves 611 three-year-olds as of the 2009-10 school year. The program is set to expand again beginning in the 2011-12 school year when public and private funds will be used to create 22 new classrooms with slots for around another 300 children.4

Return on Investment?

What kind of return on investment are taxpayers receiving? The National Assessment of Educational Progress (NAEP), popularly called “the nation’s report card,” is one testing benchmark used to measure student progress. For example, Pete Delaney, one of the business leaders involved in the OKCEO (Oklahoma Champions for Early Opportunities) initiative, recently cited NAEP data, pointing out that “in Oklahoma, the National Assessment of Educational Progress test indicates that 72 percent of fourth-graders … are not proficient in science.”5

The test also measures reading achievement. With a relatively low number of poor children, growing state spending per child, and the greatest number of four-year-olds having access to pre-K, one would expect Oklahoma to be leading the nation in fourth-grade reading scores. Unfortunately, as shown in Chart 3, this isn’t the case. In fact, Oklahoma has the second worst reading scores in the country, ranking only ahead of Mississippi.6 Worse yet, as Shikha Dalmia and Lisa Snell pointed out in The Wall Street Journal, Oklahoma actually “lost ground after it embraced universal preschool: In 1992 its fourth and eighth graders tested one point above the national average in math. Now they are several points below. Ditto for reading.”7

While fully explaining this lack of results from the pre-K system is beyond the scope of this article, this glance at the benchmark for pre-K program success strongly suggests that there are significant problems with Oklahoma’s pre-K model.

Recent survey data show that fewer than one in four Oklahomans believe taxpayers are getting a good return on their public school investment.8 Clearly that disappointment should extend to preschool as well.

Let’s Diversify Our Portfolio

Pre-K curricula stress the importance of parents reading to their young children to create reading habits that last a lifetime. Proponents also point to data showing that educated parents have children that test in the top quartile on the fourth-grade reading NAEP:

The fact is that low-income fourth-graders who cannot meet NAEP’s proficient level in reading today are all too likely to become our nation’s lowest-income, least-skilled, least productive, and most costly citizens tomorrow. Simply put, without a dramatic reversal of the status quo, we are cementing educational failure and poverty into the next generation. We know, for example, that a child’s early success correlates with his or her mother’s level of education. Kindergarteners whose mothers have more education “are more likely to score in the highest quartile in reading, mathematics, and general knowledge than all other children” and to have better motor skills than children whose mothers have less formal education, according to a longitudinal study of 3.7 million children who entered kindergarten in 1998.

Students whose mothers have less than a high school diploma or its equivalent are more likely to be retained in grade than children whose mothers have a bachelor’s or graduate degree (20% versus 3%). The bottom line is that if we don’t get dramatically more children on track as proficient readers the United States will lose a growing and essential proportion of its human capital to poverty, and the price will be paid not only by individual children and families but by the entire country.9

So this begs the question: If children who are read to by their educated parents have the highest scores on the NAEP, perhaps, at a minimum, giving educated parents the financial incentive needed to stay at home and read to their young children would significantly help reading scores. Therefore, it makes sense to stop putting all our educational eggs in one basket—an ever-expanding pre-K program that isn’t working. Instead, policymakers should diversify their preschool portfolio, redirecting some of the money to parents.

Doing so would not require great political courage, because recent survey data indicate this is in fact what Oklahoma parents want. “Now thinking about early-childhood policies in Oklahoma,” SoonerPoll said in a recent question, “do you think state government should focus more on creating and expanding programs for children from birth to age five, or making it easier and more affordable for one parent to stay at home with children from birth to age five?”


Only 26 percent of respondents said programs, while 57 percent said parents. Among women, the margin was similar: 30 percent to 56 percent.10

And consider another SoonerPoll question: “In two important ways, Oklahoma is a national leader in early childhood education. First, among all the states, Oklahoma has the highest percentage of four-year-olds in state-funded preschool programs. Second, Oklahoma is one of the few states that offer a tax break for stay-at-home parents. Assuming there is a limited amount of money, which of the following do you think should take precedence: Increasing the amount of money spent on preschool programs for four-year-olds, or expanding the tax break for parents who stay at home with their four-year-olds?”

By a margin of 55 percent to 31 percent, Oklahoma parents prefer the tax break. Among women, the margin was similar: 51 percent to 35 percent.11

So, one way to diversify the preschool portfolio would be to expand this tax credit. Another option has been suggested by Cato Institute scholar Adam B. Schaeffer. In his report “The Poverty of Preschool Promises: Saving Children and Money with the Early Education Tax Credit,” Schaeffer proposes a tax credit which he says “would improve the quality and efficiency of preschool options by harnessing market forces and would pay for itself by using savings generated from the migration of students from public to private schools in grades K–4.”

Both of those tax credits are good ideas, but there’s a new kind of proposal on the school-choice landscape that also deserves consideration.

Discussions about Education Savings Accounts (ESAs) by Florida Governor Rick Scott and Taxpayer Savings Grants (TSGs) by Texas Governor Rick Perry have spurred all kinds of excitement in the school-choice community. In a Wall Street Journal column, John Fund discussed the Texas proposal:

It’s called the Taxpayers’ Savings Grant, and it would provide grants of up to $5,143 or the cost of private school tuition, whichever is less, for every Texas child who moved from a public school to a private school. Those eligible would be parents whose children are entering either kindergarten or first grade, and those with kids who have been in public schools for at least one year. The plan has significant support from state legislators and some school principals.12

In Florida, former Governor Jeb Bush has advised Governor Rick Scott that ESAs could be a game-changer. As Education Week’s Sean Cavanagh explained it, “The idea is to allow K-12 students to take a large share of the per-pupil allotment they receive for public school and use it for private school tuition instead. While many state voucher programs offer public money for private schools for targeted populations—such as special-needs and disadvantaged students—some have described education savings accounts as ‘vouchers for all.’”13

Additionally, what if the funds for an ESA could be used by a stay-at-home mom in lieu of sending her toddler to public pre-K? In a recent OCPA paper on digital learning, Dan Lips lays out a model for ESAs which would allow parents the choice to use the funds for education at home. Lips refers to a report by Matthew Ladner and Nick Dranias of the Goldwater Institute entitled “Education Savings Accounts: Giving Parents Control of Their Children’s Education,”14 which provides a model for “a state-funded ESA plan for Oklahoma.”15 As Lips describes it:

Under the Goldwater Institute’s plan, parents could receive a portion of their children’s share of state public education funding in a state-authorized ESA if they agree to forego enrolling their child in a traditional public school. Parents could use that funding to purchase the best education services for their children, such as private school tuition, online or virtual education programs, homeschooling curriculum, and tutoring services.16

If the combined federal and state spending on pre-K of $7,855 per child in 2010 were shifted into an ESA account, a family’s budget could be significantly improved such that the choice for a mom to stay at home could become realistic. When one looks at how little a working mom nets after taxes and the cost to go to work (a second car, gas, lunches, professional clothing, after-school babysitting, etc.), the amount currently spent on public pre-K could fund an ESA capable of plugging the hole in the family budget that drives some moms to work instead of staying at home with their children. Then Oklahoma would begin to see real progress in educational outcomes.

Economist Wendy P. Warcholik (Ph.D., George Mason University) is an OCPA research fellow.


1 Fielding, Lynn, Nancy Kerr, and Paul Rosier, Annual Growth, Catch-Up Growth. The New Foundation Press: Kennewick, WA, 2007.

2 “Early Warning! Why Reading at the End of the Third Grade Matters,“ 2010, Annie E. Casey Foundation, p. 15.

3 “The State of Preschool 2010,” National Institute for Early Education Research, p.110.

4 “The State of Preschool 2010,” National Institute for Early Education Research, p.111.

5 Delaney, Pete, “Early childhood ed, economic development go hand in hand,” The Oklahoman, August 5, 2011,

6 “Early Warning! Why Reading at the End of the Third Grade Matters,“ 2010, Annie E. Casey Foundation, p. 13.

7 Dalmia, Shikha, and Lisa Snell, “Protect Our Kids from Preschool,” The Wall Street Journal, August 22, 2008,

8 Burt, Wesley, “Likely Oklahoma voters do not see good return on education spending investments,” September 15, 2011,

9 “Early Warning! Why Reading at the End of the Third Grade Matters,“ 2010, Annie E. Casey Foundation, p. 7.

10 “Strong majority of likely Oklahoma voters prefer tax relief over early-childhood programs, preschool,” SoonerPoll, August 18, 2011,

11 Ibid.

12 Fund, John, “Texas’s School-Reform Opening,“ The Wall Street Journal, May 26, 2011,

13 Cavanagh, Sean, State Education Watch, August 24, 2011,

14 Dranias, Nick, and Matthew Ladner, “Education Savings Accounts: Giving Parents Control of Their Children’s Education,“ Goldwater Institute, January 28, 2011.

15 Lips, Dan, “Education in the Digital Age,“ Oklahoma Council for Public Affairs, July 2011, p. 12.

16 Ibid., p. 12.

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