Policy Tip Sheet No. 5 – Iowa Preschool Funding Subsidy

Published March 10, 2011

Iowans are currently funding a universal statewide preschool program at more than $3,500 per child. The program cost the state more than $70 million last year, and the costs have been growing since its inception.

Gov. Terry Branstad has advocated a slightly less burdensome plan that would give preschool vouchers to families earning less than 300 percent of the federal poverty line. Conservative estimates suggest a $43 million pricetag for the plan.

Iowa’s budget crisis and a lack of supporting research make the Iowa preschool policy, or any government-funded preschool system, problematic and burdensome to taxpayers.

Policy Solution

Iowa should repeal its subsidy for universal preschool and offer no replacement. While providing every child a preschool education sounds ideal, the program is more expensive than justified by any marginal short-term gain in student achievement.

Early childhood education has not proven effective in the long-term, and Iowa’s budgetary situation necessitates that state policymakers make tough decisions about the core functions of government.

Research shows that preschool programs are not effective when paired with public schooling, because any short-term positive effects fade by around the third grade.

As the program grows, it becomes even more financially burdensome. In an economic recession – as more people start to lean on strained social programs – this program could lead to higher taxes burdening an already-ailing state economy.

Policy Message

Point 1. The cost of Iowa’s universal preschool program has grown from $15 million when launched to more than $70 million.

Point 2. Pre K-12 education expands an already-bloated public education system.

Point 3. Gov. Branstad’s voucher counter-proposal is not a “voucher,” but rather a subsidy for a program that should not be considered universal.

Point 4. “Free” preschool crowds out private preschool programs and ultimately limits consumer choice and competition.

Point 5. Similar programs in Georgia and Oklahoma have failed to produce any significant effect on student achievement.

Policy Facts

Fact  1. Iowa could cover more than 10 percent of its $700 million budget shortfall by eliminating this program.

Fact  2. In a 2010 Heartland Institute study, Iowa received a “D” grade, among the worst states in terms of public school achievement. Iowans should focus on improving an ailing K-12 education system before expanding to preschool.

Fact  3. Georgia’s universal preschool system has failed to close the achievement gap in 15 years. After spending more than $216 million on preschool, state auditors admit the program has produced few if any long-term gains.

Fact  4. Oklahoma’s universal preschool program enrolls more than 70 percent of the state’s four-year-olds and costs taxpayers more than $140 million annually. Since the program’s implementation in 1998, the state’s scores on national achievement tests have fallen.

Fact  5. Studies from the U.S. Department of Health and Human Services show even Head Start has failed to produce meaningful increases in acheivement for low-income students and no effects on behavior – despite receiving more than $100 billion in federal subsidies