Committee OKs using reserve cash to pay for city preschool program

A City-County Council committee tonight backed a bipartisan plan to tap reserves and other funds to pay the city’s share of Mayor Greg Ballard’s plan to pay for up to 1,000 poor kids to attend preschool.

The Community Affairs and Education Committee unanimously approved the plan. Using primarily set aside money, rather than the city’s general fund, must also win support of the full Indianapolis City-County Council, which in December passed the framework for the preschool program by a wide margin.

“The truth is that quality preschool and quality early education shouldn’t be a privilege,” said Council Vice President and Democrat John Barth. “We’re making an important dent and an important first step with these votes tonight.”

The committee approved setting aside $4.2 million in city dollars to fund the first year of what is expected to be a five-year program. The city plans to use $2 million by tapping into the city’s fiscal stability fund, with $500,000 of that coming from interest, $1.7 million that was saved through a change to the homestead tax credit program and $500,000 from county option income tax, according to the city’s Office of Education Innovation. Both the Republican mayor’s office and several council Democrats have backed the plan.

The city’s investment is expected to be $20 million over five years. Another $20 million is expected to be raised by corporate and philanthropic donors.

Councilwoman Pam Hickman, a Democrat, said she wanted to make sure the Council would not be asked later for public safety tax money to replenish cash depleted by tapping into reserves. Previously, the reserve fund has funded new Indianapolis Metropolitan Police Department recruits. City officials urged that no public safety dollars would be used to pay for preschool.

“That would be a real downer,” Hickman said.

Councilman Jefferson Shreve, a Republican, said he worried about approving only one year of funding for the program since its future viability would hinge on annual council decisions. He also noted philanthropic gifts are dependent on public support. But he ultimately voted in support of the plan.

“It seems that this is very optimistic,” Shreve said. “At the minimum, your office is (proposing spending) $43 million over five years. We’re a long way from there.”

The council committee unanimously approved United Way of Central Indiana Inc. as the preschool program’s administrator. The organization, which also is running the state’s new preschool pilot program, hopes to increase the number of high-quality preschools in Indianapolis, as well as lead efforts to encourage families to enroll their children.

United Way CEO Ann Murtlow her organization’s aid has helped increase the number of highly-rated preschools in Indianapolis by more than 15 percent.

“We have demonstrated a clear moving of the needle on this community issue,” Murtlow said.

United Way, which said it will raise $7.5 million for the program, said it will spend at least 92.5 percent of the public funds it receives to pay for the program on scholarships. Twenty-five percent of the scholarships will be for three-year-olds. Each scholarship would range from $2,500 to $6,800 per year depending on the provider.

The organization’s administration fee for the program is up to 7.5 percent, Murtlow said, or around $315,000 per year. That pays for two United Way staff members to run the program as well as contractors to support the outreach, technology and transportation.

Preschool supporters came out in large numbers, wearing matching green shirts, to support the program.

Maddie Denton, a Kindergarten teacher at Greenbriar Elementary School in Washington Township, said she is saddened by the children who start school in her class without the most basic school skills.

“They deserve to know how to hold a pencil and scissors when they walk through my door,” Denton said.

The plan is expected to be heard at the council’s full meeting in March.