Included in President Barack Obama’s 2014 budget is a proposal to expand federally funded pre-K, to be paid for by raising the federal cigarette tax from $1.01 per pack to $1.95.
Research on preschools has shown they have a limited positive effect on the very poorest and neediest children, and research on broader government preschool programs shows they have little to no long-term effect on children. This is true both of long-running statewide programs in states such as Georgia and Oklahoma, and of the federal Head Start and Early Head Start programs.
Small-government proponents and family advocates note the research on government-funded preschool programs is mixed at best and indicates a vast amount of wasted time and taxpayer money at worst. Noting family stability and concern for education are the most important indicators of children’s future success in education and life, they say government would do better to increase incentives for families to care about their children’s education and make life choices likely to promote their children’s well-being.
Proponents of government-financed preschool estimate increasing the federal cigarette tax by 94 cents per pack would bring in $78 billion over 10 years for the program. However, cigarette taxes rarely bring in the revenues advocates predict, largely because that tax base is both narrow and shrinking. According to The Wall Street Journal, the “number of cigarettes sold in the U.S. dropped to about 300 billion in 2010 from about 400 billion in 2001.”
The tax is also highly regressive. According to the Bureau of Labor Statistics, 95.8 percent of expenditures on tobacco products are made by families making less than $150,000 a year.
Once this unreliable tax revenue stream dries up, advocates of the program undoubtedly will press for more tax hikes to fund the expanded pre-K program of dubious benefit.
The following documents offer more information about universal pre-K, Head Start, and tobacco taxes.
Funding Growing Programs with Declining or Finite Revenue Sources
http://taxfoundation.org/blog/funding-growing-programs-declining-or-finite-revenue-sources
The Tax Foundation demonstrates how using a declining source of revenue such as a tobacco tax to fund a growing program leads to deficits. The document points out President Obama’s pre-K expansion plan “actually increases the deficit starting in 2019 and growing thereafter. By 2023, the program will cost $12 billion each year but the tax will only be bringing in $6 billion, increasing the deficit by $6 billion a year.”
HHS Releases Negative Head Start Evaluation Four Years Late
http://news.heartland.org/newspaper-article/2013/01/15/hhs-releases-negative-head-start-evaluation-four-years-late
http://heartland.org/policy-documents/third-grade-follow-head-start-impact-study-final-report
School Reform News reports that “In January, Congress voted to send an extra $100 million to Head Start, a few weeks after the Department of Health and Human Services (HHS) released its long-overdue evaluation of the federal preschool program, finding it has no benefit to children past first grade.”
Obama will Mandate Head Start Competition
http://www.usatoday.com/news/washington/story/2011-11-07/head-start-obama-congress-funding-compete/51116400/1
Low-performing Head Start federal preschool providers must compete for funds under a new Obama administration regulation, reports USA Today. As many as one-third of current contractors must submit grant proposals to continue receiving federal funds, beginning in December 2011. The administration decided to change the rules without approval from Congress, as Republican lawmakers looked to cut the program they call widely ineffective and wasteful.
Preschool’s Failures
http://reason.org/news/show/preschools-failures
The evidence from state-led preschool programs shows little to no long-term academic effects on the children, writes Lisa Snell for the Reason Foundation. States including Louisiana, Michigan, and Massachusetts have boosted state spending on government-funded preschool programs despite their poor track record in other states such as Ohio, Oklahoma, and Georgia.
The Poverty of Preschool Promises: Saving Children and Money with the Early Education Tax Credit
http://heartland.org/policy-documents/poverty-preschool-promises-saving-children-and-money-early-education-tax-credit
Adam Schaeffer of the Cato Institute argues there is a better solution for student achievement problems than expanding pre-K: “Preschool can provide small but statistically significant short-term gains for low-income children; however, these gains usually fade quickly in later grades. There is little evidence to support the belief that large-scale government preschool programs are effective, by themselves, in improving long-term student outcomes. Reform of the existing K–12 system should therefore remain the primary focus of those interested in sustainable improvement in student outcomes.”
Reviewing the Research on Universal Preschool and All-Day Kindergarten
http://heartland.org/policy-documents/reviewing-research-universal-preschool-and-all-day-kindergarten
This Policy Note from the Washington Policy Center considers the child-care environment for preschoolers in Washington state and debunks the claims being made by universal preschool proponents. It also points out that studies have concluded the highly regulated universal preschool programs in Georgia, Oklahoma, and New Jersey have provided no long-lasting learning benefit to children.
Research & Commentary: Top Ten Reasons Not to Raise Tobacco Taxes
http://heartland.org/policy-documents/research-commentary-top-ten-reasons-not-raise-tobacco-taxes
This Heartland Institute Research & Commentary explains how targeted tax increases on items such as cigarettes push sound fiscal policies and real budget reforms to the public policy back burner.
Five Things to Consider Before Raising Tobacco Taxes: A Review of the Research
http://heartland.org/policy-documents/five-things-consider-raising-tobacco-taxes-review-research
The Heartland Institute’s former Vice President Eli Lehrer argues, “Tax increases above current levels are not justified by appealing to the costs that smokers impose on nonsmokers. Smokers already pay more than this measure could justify.”
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the School Reform News Web site at http://news.heartland.org/education, The Heartland Institute’s Web site at http://heartland.org, and PolicyBot, Heartland’s free online research database, at www.policybot.org.
If you have any questions about this issue or The Heartland Institute, contact Heartland education policy research fellow Joy Pullmann, at 312/377-4000 or [email protected].
John Nothdurft joined the staff of The Heartland Institute in May 2008 and left in January of 2019.
Joy Pullmann is a research fellow on education policy for The Heartland Institute and managing editor of The Federalist, a web magazine on politics, policy, and culture.
