Test case

One Colorado school district’s closely watched experiment in financing full-day preschool

PHOTO: Ann Schimke

The sunny preschool classroom at Fairview Elementary looks and sounds pretty typical.

In one corner, children play dress-up with hats, goggles and necklaces. Across the room, three children chatter as they count colorful plastic bears.

But what makes this preschool room different from most others in Colorado is how it came to be.

The classroom — along with six others sprinkled throughout Westminster Public Schools — was born out of a new financing model that many observers believe could provide critical funding for early childhood programs while saving taxpayer money in the long run.

It’s called Pay For Success financing.

The idea is that private investors or philanthropists pay upfront for proven social programs such as preschool for low-income children. If those programs save public money by preventing costly services such as special education, the investors are repaid with interest. If a project doesn’t yield the hoped-for savings, the investors lose some or all of their money.

Chalkbeat reporting on Pay For Success

Common Pay For Success focus areas 

  • Early childhood education
  • Recidivism
  • Chronic homelessness
  • Juvenile Justice
  • Child welfare

The model has been around for about six years—used first in England for a program aimed at reducing recidivism, and thus pricey prison stays. In recent years, it’s caught on in the United States, with groups in Salt Lake City and Chicago using it to pay for preschool. Denver is using the mechanism to combat chronic homelessness.

The pilot project in Westminster Public Schools, which launched with a half-million dollars from two foundations, is not a full-fledged Pay For Success project because it doesn’t include the typical provision that investors get fully repaid if the program succeeds.

Still, district officials and consultants say it incorporates several components of the model, including a rigorous evaluation by an outside contractor to measure impact.

For Colorado’s early childhood community, the project provides the first real-life test of key parts of the complicated funding mechanism.

“It’s definitely a milestone,” said Mary Wickersham, a consultant who’s worked on the project. “I think very much that the state and other districts will be watching the pilot pretty closely.”

The purpose of the project is to compare the impact of the district’s new full-day preschool program to the half-day program it’s offered for years.

If—as national studies suggests—the full-day offering means bigger learning gains for low-income students, administrators hope to expand the pilot into a full-blown Pay For Success project.

“You would have a really great blueprint for districts across the state to adopt similar models,” Wickersham said.

Quick turnaround

While Westminster’s seven new full-day preschool classrooms have been up and running since the school year began, workers are still adding finishing touches like age-appropriate playgrounds at some schools.

A worker prepares the site for a new preschool playground at Fairview Elementary School.
PHOTO: Ann Schimke
A worker prepares the site for a new preschool playground at Fairview Elementary School.

The last-minute hustle bustle illustrates just how much of a whirlwind the Pay For Success journey has been for the district. It all began just over a year ago when the district won a federal grant that allowed it to hire an expert to study the feasibility of Pay For Success work.

That expert was Billy Powers, now a senior policy associate for the Sorenson Impact Center at the University of Utah. When he started his year-long stint in Westminster in July 2015, the effort was a “purely theoretical exercise,” he said.

The goal was to make the district’s preschool offerings into something more substantial. About 80 percent of the district’s students come from low-income families, so the traditional four days of half-day preschool didn’t seem like enough for the children or their working parents.

That said, the price tag for full-day preschool five days a week was formidable. Not only is it more expensive than other grades because of student-teacher ratio requirements and class size caps, but state funding for at-risk preschoolers is mostly for half-day slots.

That’s where two Denver-based funders came in—Gary Community Investments and the Ben and Lucy Ana Walton Fund of the Walton Family Foundation. Together, they contributed $500,000 for the first year of the pilot, and will give additional dollars next year. (The Walton Family Foundation and Gary Community Investments — through the Piton Foundation — are Chalkbeat funders).

“It becomes super-expensive, which is why we needed this offset or we couldn’t have pulled this off,” said Mat Aubuchon, the district’s director of early childhood education.

About 400 families vied for the 112 full-day slots available for 4-year-olds this year. While some slots are tuition-based, the vast majority are free for families and were awarded through a lottery.

No repayment this time

In a true Pay For Success transaction, Gary Community Investments and the Walton fund would recoup their money if the full-day preschool program helped the school district and state avoid certain costs — say, those associated with special education services or providing extra help to struggling readers and English Language Learners.

Lexie Lawniczak, one of the district's seven new full-day preschool teachers, talks with a student in her class.
PHOTO: Ann Schimke
Lexie Lawniczak, one of the district’s seven new full-day preschool teachers, talks with a student in her class.

But that won’t happen in this case—at least not fully. That’s because district administrators and consultants didn’t believe they had strong enough data to support their predictions and didn’t ask the state—likely a key partner in the repayment role—to sign on.

Even so, the project will give district officials, the two funders and other interested parties useful insights into whether full-day preschool is a viable Pay For Success project.

For example, the outside contractor’s planned study of the preschool project — using a gold-standard randomized control trial — will provide clear data on full-day preschool outcomes such as kindergarten readiness and frequency of special education referrals.

In addition, district officials will carefully track any savings gleaned from the full-day preschool program just as they would in a true Pay For Success project.

They may pay a portion of the original $500,000 back to the two foundations, but the official project agreement also allows the funders to re-invest any savings back into the program, Aubuchon said.

Other projects in the works

As Westminster’s preschool pilot unfolds this year, other early childhood Pay For Success projects are in development across the state.

The Early Childhood Council of Boulder County is studying the possible expansion of a home-visiting program—the Community Infant Program—that aims to prevent child abuse and neglect. In addition, an Adams County nonprofit, Growing Home, is considering expansion of a different home-visiting program called Parents as Teachers.

“There’s a lot of Pay For Success activity in Colorado and there’s a lot that makes Colorado stand out nationally,” Wickersham said.

Among 57 projects that have been seeded with federal planning grants, nine are in Colorado.

There’s also an active group of prospective Pay For Success funders here, she said. They began meeting more than two years ago, originally focusing on early childhood efforts, but branching out since then.

Wickersham said the group, of which both Gary and Walton are part, “is to my knowledge completely unique nationally…so much so that even the folks from the White House say that it is a tremendous element of the Colorado landscape that most states don’t have.”

A new floor

Colorado’s new minimum wage means raises for child care workers and tuition increases for parents

PHOTO: Ann Schimke
Loveland's Teaching Tree Early Childhood Learning Center was one of the first two centers in the state to get a Level 5 rating in the Colorado Shines rating system.

Child care teachers and assistants absolutely deserve the raises that come from Colorado’s new minimum wage of $10.20 an hour, their bosses say, but the pay increases also mean that many providers will pass on the new expenses to tuition-paying parents already stretched thin by child care costs.

“I don’t know how much more parents can pay,” said Diane Price, who heads a nonprofit network of seven centers in Colorado Springs.

In some parts of the state, early childhood advocates also worry that the raises mandated by the minimum wage hike will cause some workers to lose public benefits by pushing their income just above the eligibility threshold — making it harder, not easier to make ends meet.

In a field working to professionalize its ranks, pay its workers more, and raise awareness about the educational and economic value of quality child care, many observers say the minimum wage increase is a step in the right direction.

“It’s an important move,” said Christi Chadwick, director of the “Transforming the Early Childhood Workforce” project at the nonprofit Early Milestones Colorado. “The thing I struggle with is we’re still not getting people out of poverty and paying them on par with the public school system.”

Price, the president and CEO of Early Connections Learning Centers, said, “Shame on us that we even have to have this discussion that early educators are in a category that pays minimum wage.”

The latest minimum wage increase, which took effect Jan. 1, is the second of four annual increases mandated by a ballot measure approved by Colorado voters in 2016. The last step of the phase-in process will boost the minimum wage to $12 in 2020.

Colorado is among 29 states — most in the northeast and west — that have set a minimum wage higher than the federal rate of $7.25 an hour, according to the U.S. Department of Labor.

Child care providers here say advance planning and clear communication with parents have helped them incorporate raises into their budgets.

Price, who raised tuition slightly at her centers last August, said she anticipates a budget hit of about $600,000 over the four-year phase-in period.

But that’s not just because her lowest paid staff members are getting raises to comply with the minimum wage law. Like many other child care directors, she’s giving raises across the board out of fairness to veteran employees.

Price said she didn’t want entry-level employees to catch up with those who already hav a Child Development Associate credential or an associate’s degree.

Heather Griffith, who leads the for-profit Young Peoples Learning Center in Fort Collins, is taking the same approach. Her whole staff, except two brand new employees, have received raises.

She’s already sent out a letter notifying parents that tuition will go up 6.5 percent on February 1 – that’s an additional $16 a week for a full-time preschool slot. It’s the second of three tuition hikes Griffith will institute during the minimum wage phase-in period.

While the higher costs are hard on parents, “it’s a lot tougher for these teachers to survive on non-livable wages,” Griffith said. “I’m 100 percent in support of this minimum wage hike.”

Griffith hasn’t gotten much pushback over the impending tuition increase. The thriving economy helps. Also, she said, parents like the care her centers provide and wouldn’t be able to find it for much less unless they switched to unlicensed care, which is mostly unregulated.

Anne Lance, who heads the non-profit Teaching Tree Early Childhood Learning Center in northern Colorado, said she began planning — and frontloading — wage increases for all staff shortly after the 2016 ballot measure passed.
Currently, her entry-level teaching assistants start at $10.50 an hour even though she’s only required to pay $10.20.

“I had to get way ahead of the game … so in a couple years when it gets closer to that $12, it’s not going to kill me,” said Lance, who operates one center in Loveland and one in Fort Collins.

While the center’s two sites serve many low-income children who qualify for state child care subsidies or state-funded preschool slots, there are some tuition-paying families in the mix, too.

It’s those parents who may feel the sting of the minimum wage increases over the next couple years. Lance said she’ll keep her tuition increases to a modest 3 percent this year, but may have to jump up to 5 percent in 2019 and 2020.

On average, lead teachers with several years of experience at Teaching Tree make about $13.50 an hour. While that’s above the minimum wage, it’s not much to live on for employees on their own or those who are single parents, Lance said.

In Colorado, about one-third of child care teachers qualify for some kind of public assistance to cover housing, food, health insurance, or child care costs, according to a 2017 survey of child care workers in the state.

Chadwick, of Early Milestones, said during visits last fall to the San Luis Valley and southeastern Colorado, early childhood leaders explained that some child care workers were quitting their jobs due to fears they would lose government benefits when minimum wage-related raises took effect.

To alleviate such concerns and make child care a profession that pays a living wage, more substantial raises are needed. But Chadwick and other leaders don’t expect further funding to come from a state-level effort.

Instead, they say it will be locally-funded initiatives — already underway in some Colorado communities — that pick up the slack.

“We have to pass things like mill levies and taxes that support early childhood,” said Griffith, of Young Peoples Learning Center. “We have to do it. We have to say yes to these things if what we want is a community that has educated kids ready to go into kindergarten.”

Early childhood literacy

How to make a good reader? Combine in-school tutoring with hundreds of books for toddlers and babies

PHOTO: Helen H. Richardson, The Denver Post
Fourth graders at College View Elementary in Denver.

A new literacy program for children from babies to third grade will focus on tutoring students and encouraging reading at an early age as it works with 100 families in the Munger Elementary-Middle School area.

The 3-year pilot program will combine the resources of 80 volunteers, the Munger school staff, and Brilliant Detroit, a social service organization. Brilliant Detroit will house a national program called Raising a Reader, which will ensure that the families receive as many as 100 books each over the next three years to read to babies and toddlers.

“We believe the city of Detroit is turning around,” said former state Supreme Court justice Maura Corrigan, who is spearheading the program. “But we understand that Detroit cannot turn around effectively if the schools don’t turn around, and that can’t happen unless the children learn to read.”

The program is part of a state-wide push to help more children learn to read before a new state law takes effect in 2020 that will force schools to hold back third-graders who aren’t reading at grade level. This year, fewer than 10 percent of Detroit students met that grade-level threshold.

Announced today, the program launches in January and has more than $20,000 in funding.

Munger Principal Donnell Burroughs said students who received the lowest reading test scores will likely be the ones who receive tutoring.

“Here at Munger we want our students to continue to grow,” Burroughs said. “We will identify certain families and students from preschool to third grade and they’ll work with individual tutors who come into the school every day.”

Students will work with a tutor in groups of three for 40 minutes a day.

Lt. Gov. Brian Calley described another benefit of the program: helping students with disabilities.

“Perhaps an unintended consequence of the work that’s happening here is we can identify developmental delays and disabilities earlier for intervention.”

Calley, whose daughter has autism, is an advocate for people with disabilities. Studies have shown that early intervention improves outcomes.  

“We still have so far to go there,” he added. “This is a reading initiative, but it’s gonna have benefits beyond reading.”

Special education has been a pressing concern for education advocates in the state. The Coalition for the Future of Detroit Schoolchildren issued a list of recommendations for ways to improve Detroit schools in early December. Among them was a priority to fully fund special education.

Plans to continue or expand the program are unclear, and depend on the pilot’s success. The effort is supported by 15 local and state partners, including Gov. Rick Snyder and Raising a Reader.