During the 2021-2022 school year, Children’s Funding Project partnered with Boston Public Schools Department of Early Childhood to develop a cost model to inform the district’s and city’s funding of universal preschool classrooms in community-based child care centers. Cost modeling is one part of the strategic public financing process. The act of developing the cost model and engaging with community members and universal preschool providers in Boston allowed us to develop a new funding formula for universal preschool that supports high-quality learning and stabilizes classrooms. The new hybrid funding approach—which the district implemented for the 2022-2023 school year—provides programs with base-level per-classroom funding as well as additional funding allocated per child. This new approach represents an exciting method for solving early childhood funding challenges that communities and states across the country are facing. Our work with Boston Public Schools supports our efforts to build a movement among state and local leaders and advocates to increase equitable funding for services and programs for children and youth.

A New Approach to Program Funding

Since 2019, Boston Universal Pre-K (UPK) has offered free preschool to all 4-year-olds who live within city limits. It expanded in 2021 to serve 3-year-olds. Boston Public Schools administers the program and provides preschool services both in public school buildings and in community-based child care organizations to ensure enough capacity across the city and to provide more family choice.

While community-based child care organizations have increased access to Boston’s quality UPK program, it became apparent from feedback from UPK partner organizations that the structure and amount of the city’s original funding formula used to support these classrooms was insufficient. Initially, Boston Public Schools gave UPK providers $11,000 per child. This funding was heavily restricted and inadequate. Moreover, the original per-child funding model only funded six and one-half hours of care per day for 180 days per year, even though community-based child care organizations generally operate 10 hours per day year-round. At the same time, not all children in the Boston UPK program have access to a state child care subsidy to afford the additional care beyond the core six and one-half hour day (including before-school, after-school, and summer care—commonly known as wraparound care).

Recognizing that the funding model was no longer sustainable for community-based child care organizations, Boston Public Schools Department of Early Childhood partnered with us to create a cost model to understand the true cost of implementing the preschool program and to explore ways to create a more stable funding structure. School district staff and Children’s Funding Project convened an 18-member working group over the course of seven months. The working group engaged all invested partner groups including community-based UPK provider leadership, members of the UPK Advisory Committee, and the Early Childhood Family Council.

The resulting cost model disaggregated program costs to expose the differences based on the length of the program day, school year versus full year care, and per-child and per-classroom costs. To build stability and quality, Boston Public Schools used this information to develop a new hybrid funding model for its Boston UPK classrooms located in community-based programs, which the district implemented for the 2022-2023 school year.

Each Boston UPK classroom now receives a base funding level that covers the full salaries and benefits of teaching staff and a portion of related administrative staff. (UPK teachers in community-based programs receive salaries commensurate with the district teacher union’s starting salary scale, resulting in significantly lower staff turnover rates in UPK-funded classrooms.) Personnel is, by far, the greatest expense for early childhood programs, so covering these costs provides immediate stability to the classroom and program. Each classroom also receives an additional amount of funding for each UPK-eligible child enrolled in the program. This encourages programs to strive for full enrollment and helps to fully fund quality components.

Supporting Extended Care

The new classroom-based funding model also encourages providers to increase access to wraparound support for all Boston UPK families who express a need for extended care. Now that the per-classroom funding model covers the costs of classroom teachers’ salaries, UPK providers indicate that they feel much greater flexibility to help children access extended learning beyond the core program hours, regardless of whether those families receive a state child care subsidy or not. Boston Public Schools is pursuing ongoing analysis to track extended learning participation as well as the financial impact of this new change on programs.

Addressing Unintended Consequences in the Child Care Field

Yet while the Boston UPK program creates well-resourced classrooms serving 3- and 4-year-old children, it also has unintended consequences in community-based child care organizations. The community-based child care organizations have other classrooms (sometimes even companion pre-K rooms not funded through Boston UPK) in their centers with teachers who are not paid as well as Boston UPK classroom staff. Oftentimes, these teachers have the same career credential and/or experience as a Boston UPK teacher. In these situations, participation in Boston UPK can create disparities in pay among staff within the same child care center and can disincentivize staff from staying in non-UPK classrooms, especially infant and toddler classrooms. The working group identified the needs of the broader child care field to support care for children from birth to age 3 in non-UPK classrooms, including teacher salary increases.

Related to the needs of the broader child care community, the City of Boston’s Office of Early Childhood launched the Stimulus and Stability Fund and the Essential Worker Childcare Fund—two funds supported with the city’s American Rescue Plan dollars—to provide child care workers with higher wages, hiring and retention bonuses, and other compensation incentives. The city announced these new programs in November 2022.

Boston UPK’s new funding model is a progressive approach toward developing a sustainable and stable high-quality universal preschool system. By providing a base level of funding to each classroom, Boston UPK ensures that community-based providers can cover their fixed costs (like teacher salaries) even if their enrollment levels fluctuate. Meanwhile, providing an additional set amount of funding for each enrolled child encourages providers to fill all the available slots in their programs, ensuring that any child who wants to participate can access the program.

Key Takeaways

Communities interested in rethinking the funding structure for their own early care and education programs can draw on these lessons from Boston UPK’s experience:

1. Engage with your invested collaborators to understand their challenges serving their communities.
2. Consider building a cost model based on salaries and nonpersonnel costs specific to your geographic region, along with common revenue sources and amounts. This aids in building a case for why a classroom-based funding model rather than a per-child funding model could create more stability within your programs.
3. Present financial data created from the cost models to local providers to make sure the data resonates with impacted partners. Foster conversations around a transition to a per classroom-based funding model to help assess if this new funding model makes sense for the needs of providers in your community.
4. If your community favors the classroom-based funding model, identify the existing or new revenue streams your program can tap to support any additional financial needs to provide equitable, high-quality services for children ages birth to five.

By accurately assessing the true costs of care, as Boston UPK has done, early care and education programs can create better strategic public financing plans that ultimately ensure that more families have access to the affordable, quality, and equitable child care they deserve. Boston UPK continues to expand to serve more 3- and 4-year-olds, including adding to the mixed delivery system by funding family child care settings in 2023-2024.

Kate Ritter is a senior manager of cost modeling at Children’s Funding Project.