Providers of ACS-funded day care and early childhood education are grappling with the potential impact of steps recently announced by Commissioner John Mattingly to close a $62 million budget deficit in the program. The three-part program includes:
• A reduction of total combined funding for centers which also have separate Department of Education contracts to provide Universal Pre-K programs;
• The closing of vacant “classrooms” in 21 centers with historically high vacancy rates; and,
• The elimination next school year of an estimated 3,000 ACS-funded slots serving five year olds who will now be directed to kindergarten classes in City Public Schools with after-school programming provided through DYCD funded OST programs.
Since 2005, “the cost of providing child care has continuously risen, including increased costs of health insurance for employees, liability insurance, facility costs, etc.,” ACS Commissioner John Mattingly told the City Council during testimony on November 20th. “In contrast, funds provided by the State and Federal government have not increased in proportion to these expenses… As a result, we are facing a $62 million gap this fiscal year… Over the past several years, the City has made up the difference for child care spending with one-time financial strategies. Those strategies are no longer viable now in this economic climate….If we do not make the changes that I am about to describe, we would need to cut subsidies to more than 7,300 children from low-income families in order to manage this system within our existing funds.”
The sudden announcement which came outside of the Mayor’s recent November Financial Plan budget cuts surprised many advocates, even as they were aware of funding problems in the City program and ACS’ longer term plans to eliminate funding for vacant slots and older children.
“I didn’t expect any of this,” said Andrea Anthony, Executive Director of the Day Care Council of New York City.
Advocates and providers generally expressed concerns on two levels – the downsizing of the ACS-funded system by an estimated 4,500 slots, or 19%, even as there continue to be long waiting lists for day care subsidies, and the cumulative impact of these cuts on the financial stability of the City’s provider network. In addition, advocates questioned a strategy which will continue closing child care classrooms in community based facilities while simultaneously transferring 3,000 additional children into public schools which are already overcrowded.
"The City is slowly strangling child care centers to death," said Councilmember Bill de Blasio, Chair of the General Welfare Committee, in response to the ACS testimony. "Low-income families are on long waiting lists for subsidized child care, yet the City consistently fails to refer them to vacant slots and then penalizes centers for under-enrollment."
“The combination of these three things, in addition to the vacancies that were created by the transfer of school aged child care to OST, raises questions about how many programs may not be able to survive. That is a big challenge,” said Nancy Kolben, Executive Director of Child Care Inc.
“It is going to be a challenge,” said Leonard Fennell, Executive Director of the Helen Owen Carey Child Development Center in Brooklyn. “We may be able to survive but other programs may not.”
Like many City-funded centers, Fennell expects to be impacted by two aspects of the new ACS program.
UPK Cost Allocation
Under the new “enforced cost allocation” model for centers with separate Department of Education contracts for UPK programs, Fennell will see a significant reduction in the additional funding originally provided to meet the higher UPK service standards. Until now, the DOE contracts provide approximately $3,300 per child to support the 2.5 hour UPK program with ACS funding wrap around services for the balance of the extended day or care. The new ACS funding model will reduce this additional UPK funding to only $800, resulting in a net loss to the center of approximately $2,500 per child. With 50 children enrolled in UPK, the cut will cost Helen Owen Carey approximately $120,000 annually, with the budget reduction scheduled to go into effect on January 1st.
“We will enforce cost-allocation for all UPK child care seats so that the City is not paying for the same services twice,” Mattingly said in his testimony to the Council. The move will affect only those centers with DOE contracts. ACS recently imposed the $800 “cost allocation” model to day care centers which added UPK programming through an ACS RFP.
Advocates argue that the costs of meeting the higher UPK program standards significantly exceed the $800 being offered by ACS, particularly in light of the relative weakness of the City’s funding for basic day care services.
“The ACS proposal to cut funding from these programs will take away provider’s ability to bring the benefits of UPK to the children of working parents,” said Nancy Wackstein, Executive Director of United Neighborhood Houses.
Five Year Olds
The ACS move to eliminate future slots for an estimated 3,000-plus five-year-olds -- who are eligible to attend public school kindergartens -- also raised several sets of concerns.
While recognizing the appropriateness of kindergarten education programs for these children, advocates express concerns about the ability of both public schools to handle the sudden influx of new children.
“We are seeing an increased amount of overcrowding in many neighborhoods throughout the system and an increased number of kindergarteners because we have a rising birth rate in this city,” said Leonie Haimson, Executive Director of Class Size Matters. Rather than closing down child care capacity, Haimson called for an alternative strategy to transfer UPK programs out of public schools and into to community-based facilities. “The maximum number of Pre-K seats should be sited in community based organizations to free up space in our public schools for smaller classrooms and other services we need,” she said.
Advocates also questioned the capacity of DYCD-funded Out of School Time (OST) programs to continue providing yearround, extended day, wrapparound child care which these younger children will need. “There aren’t DYCD programs in every public school and many of these programs are already full and have long waiting lists. There is no assurance that parents will be able to get their kindergarten children enrolled,” said Sandy Socolar, Senior Policy Analyst with DC1707 which represents day care employees in the City-funded centers.
The loss of 3,000 slots for five-year-olds – representing a loss equal to approximately 150 classrooms systemwide -- is also expected to have a significant impact on the financial stability of day care programs and their staff. Helen Owen Carey, which currently serves 20 five-year-olds, or the equivalent of one classroom, estimates the loss at over $200,000 annually.
“These cuts will mean layoffs,” said the Day Care Council’s Andrea Anthony.
“Empty Classrooms”
The third component of ACS’ plan calls for the elimination of “empty classrooms” in centers with a long term pattern of under enrollment. “There are a significant number of programs across the City which continue to be severely under enrolled by at least one classroom (or 15 or more children),” Commissioner Mattingly told the Council. “For this reason, starting in January 2009, we are going to reduce capacity within child care programs that are chronically under-enrolled, as defined by a three-year average, a 12-month average and current levels.”
While it was reported that ACS planned to eliminate capacity at a total of 21 centers, the agency has yet to identify any specific programs for reductions. An ACS spokesperson indicated that the agency was currently reviewing capacity and enrollment data in conjunction with individual agencies.
The Bigger Budget Picture
“We are very disappointed that ACS's child care budget shortfall has been so persistent and large that unless substantial funds are found outside of ACS, such dramatic action will be necessary,” said Jennifer March Joly, Executive Director of Citizens Committee for Children. “In the absence of adequate state and federal support to meet increased costs, and in light of the economic crisis, the city appears unable to continue to fill the child care budget gap. While we are relieved that children currently receiving child care will not lose services if there are enough kindergarten and OST slots available, moving forward additional resources must be secured to help preserve the city's child care centers and ensure young children have safe, quality child care while their parents are at work.”
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