Monday, January 25, 2010

Investing in Early Education Saves Michigan Taxpayers Millions, Increases Revenue

As you are reading this story, remember that Mike Bishop and the Senate Republicans suggested eliminating all early childhood education funding in the current fiscal year budget. They didn't get their wish, but funding for preschool in the Bishop-Dillon budget agreement was "drastically reduced" - and that is going to end up costing us more in the long run.

Preschool saves Michigan taxpayers mountains of money and increases revenues -- about $1.15 billion over the past 25 years, according to the first comprehensive study of the state's programs for children from birth to 5 years old, to be released today by state Schools Superintendent Mike Flanagan.

"Tax dollars are increasingly scarce," said Andy Heller, Early Childhood Investment Corp. spokesman. "Lansing needs data to set spending priorities, and research shows that early childhood programs are a sound investment."

The study, "Cost Savings Analysis of School Readiness in Michigan," estimates cost savings and revenue generated from the state's investment in programs that set the stage for school success.

This report is a conservative estimate, using a range of studies on the results of early childhood education programs here in Michigan and elsewhere when Michigan data wasn't available. The breakdown on the savings proves to be pretty predictable; common sense solutions to problems tend to yield positive fiscal results.

K-12 saved $221 million by reducing spending on students who otherwise would have to repeat a grade, addressed learning impairments with early intervention, and saved money on replacing teachers who burn out and leave the profession due to working conditions caused by bad student behavior and performance. Government spending saw the biggest overall reduction at $584 million; cuts to juvenile crime, adult crime, child abuse and neglect, improved employment chances reducing need for Medicaid and welfare, reduced child care subsidies, and increased productivity and income from better employment conditions, all lifted the burden of taxpayers. Reduced social costs to the public of $347 million included statistics on the reduction of property and violent crime losses, improved health care outcomes due to reduced drug and alcohol abuse, and increased incomes of employed parents who had more time when their children were enrolled in preschool.

To put it simply: You can pay a little now and see long term benefits, or you can make more cuts and pay a lot more later.

If the state’s current investments in school readiness were discontinued or reduced, these annual savings and revenues would subsequently erode, causing a significant negative impact on the State of Michigan's future annual budgets and overall economy. Conversely, those benefits will rise if the state sustains its current level of investment and will increase exponentially as a result of increased investment in the Great Start Readiness Program, Great Start system, and other high-quality and comprehensive programs that promote early educational preparation.

The estimated annual cost of expanding the Great Start School Readiness Program to all eligible children is at most $236 million, based on a cost of $6,800 for a full-day program per new student. That cost is less than half of the annual educational, social, and economic benefits that would eventually be realized through this additional investment in Michigan’s future.

As part of the solution to Michigan's ongoing budget problems, sure beats the hell out of "just cut everyone's salary!", doesn't it?