Multnomah County's Preschool for All program is facing a financial challenge that could have significant implications for the future of early childhood education in the region. A recent study reveals that the county's reimbursement rates for childcare providers are not sufficient to cover the true cost of care, leaving a substantial gap that needs to be addressed.
The study, conducted by Prenatal to Five Fiscal Strategies (P5FS), highlights a critical issue in the funding model of Preschool for All. According to the findings, the reimbursement rates for the 2025-2026 fiscal year were $17,532 for a six-hour day and $25,008 for a 10-hour seat, which fall short of the actual costs incurred by childcare centers and family programs.
The true cost of care per child varies depending on the type of childcare center and the length of the program. For six-hour day programs during the school year, the study estimates that the county under-reimbursed childcare centers by $2,721 per student, while over-reimbursing family childcare programs by $748. In full-year, 10-hour seat programs, the county under-reimbursed both centers and family programs, with a gap of $2,364 and $1,534 per student, respectively.
This financial disparity is not a new concern. In February, several providers expressed similar worries to county commissioners, emphasizing the need for lower ratios and additional funding for inclusion supports, especially for young preschoolers with disabilities or developmental delays. Angie Garcia, the executive director of Escuela Viva, a preschool chain, advocated for lower ratios and the ability to fund additional staff when necessary.
To address this issue, P5FS developed a dynamic cost model that considers various factors, including student age, type of center, mandatory employer taxes, licensing requirements, and Preschool for All's salary step requirements. This model will enable the county to calculate more accurately how much to reimburse preschools, ensuring that providers can cover their expenses and maintain the quality of care.
However, the study also reveals a more significant challenge. To meet the 2030 goals for hourly wages of teachers, assistants, and early childcare professionals, Preschool for All would need to reimburse providers at a much higher rate. While the county is making some progress by increasing reimbursement rates for the upcoming fiscal year, the gap remains substantial.
The financial strain on Preschool for All has sparked debates about the program's revenue and funding sources. Business groups have historically supported efforts to modify the tax, which currently relies on marginal income taxes for high earners. Last summer, Oregon Gov. Tina Kotek expressed concerns that the tax was driving high earners out of the state, although the county has disputed these claims.
The study's findings underscore the need for a comprehensive review of Preschool for All's financial sustainability. As the county prepares for another summer of discussions, it must carefully consider the implications of the study and explore innovative solutions to ensure that early childhood education remains accessible and affordable for all families in Multnomah County.
