Nebraska lawmakers are considering innovative new legislation that would build on a successful model in Louisiana that has stabilized funding for child care providers while driving quality improvements. Geoffrey A. Nagle, Ph.D., president and chief executive officer of the Erikson Institute, was instrumental in advocating for the Louisiana model and shared his perspectives in testimony before Nebraska lawmakers on February 3.
Highlights of his testimony follow:
Mr. Chairman and Honorable Members of the Revenue Committee:
My name is Geoff Nagle and I am the president and CEO of the Erikson Institute in Chicago. Thank you for the opportunity to speak to you today on behalf of LB 889. I am here both as an advocate of policy initiatives that bring stability, quality, and innovation to our nation’s child care infrastructure, and as a leader who was deeply involved in the passage of what has proven to be a successful tax credit model in Louisiana.
Before coming to Chicago to lead the Erikson Institute, the nation’s premier graduate school in child development, I led the Institute of Infant and Early Childhood Mental Health at the Tulane University School of Medicine. As in Nebraska, and in fact as in many states across the country, we wrestled with how to balance the need to improve quality child care with the increased costs that would come with it. We also knew that trying to build a high quality system without addressing how to fund it was a prescription for failure.
I cannot say that I fully appreciated the challenges of the child care business model when we began. But I learned quickly. Ultimately, it came down to economics – finding a way to financially support the small businesses that provide child care so they were not solely dependent upon state appropriations and the ups and downs of the state budget. Our solution was to create a stable source of funding through the tax code that would have cascading benefits for the state as well as for the providers, workers, families, and children – year after year.
Louisiana’s School Readiness Tax Credits were passed in 2007 with unanimous support from four committees and both chambers of the legislature, with more than 65 percent of the state’s lawmakers signing on as co-authors. It was a law that ultimately infuses accountability and incentives into the system to move the quality bar up to the benefit of all children, with financial rewards that touched every facet of the child care system from the providers to the workforce, to families and even outside businesses that were supporting their employees and community.
The Louisiana program was widely embraced as an economic development initiative as much as an early childhood initiative – which helped create a win-win all around. As we all know, many states utilize tax credits to support economic development, and so we engaged with Louisiana State University to conduct an economic impact study to document the impact of the child care sector, with findings very similar to what you have learned here in Nebraska: That the child care industry is a significant economic driver. Throughout Nebraska, you have 7,794 child care programs with revenue of some $286.7 million, according to the Committee on Economic Development, a business-led public policy organization based in Washington, D.C.
While participation in the rating system and the ability to access the tax credits is a voluntary program in Louisiana, there is clear evidence that the incentives are driving both access and quality:
- In the Louisiana rating system, quality child care is considered at three stars or above. The number of state subsidized children receiving quality care has increased 600 percent since the inception of the system, despite the fact that less children are now receiving a state subsidy.
- In the first year of the program, 123 child care providers were offering a level of quality care above minimum licensing. This increased to 647 providers five years later, an increase of 426 percent.
- In the first year of the program, 874 teachers were participating in the quality system. This increased to 3,559 teachers five years later, an increase of over 300 percent.
- In the first year of the program, 171 businesses made donations supporting quality child care. This increased to 382 businesses five years later, an increase of 123 percent.
- In the first year of the program, 4,664 families received a tax benefit through the quality system. This increased to 15,246 families five years later, an increase of 226 percent.
LB 889 will impact every legislative district in the state of Nebraska. While the legislation alone cannot address all of the vulnerabilities in the child care system in Nebraska, Louisiana, or anywhere else, it will be a tremendous step forward, with the enormous potential to help support a stable infrastructure and shift the conversation from demanding high quality child care to achieving it.