Montgomery County Early Childhood Fiscal Map

• A fiscal map documents and analyzes the various sources of funding that support programs and services for children and youth in a state, city, or county. 

• The map can include public dollars from federal, state, and local sources and sometimes private dollars from foundations and other philanthropies, if appropriate. 

• It does not mean the creation of an actual map.

Source: https://childrensfundingproject.org/wp-content/uploads/Understanding-Fiscal-Maps_FINAL.pdf; https://buildinitiative.org/approach/early-childhood-system/

Understand the FY22 and FY23 investments in the early care and education system by identifying federal, state, local, and private funding streams, including the burden on families;

Provide data to inform community conversations aimed at identifying gaps, inefficiencies, and needs of the ECE system that are not being funded and areas of overlap, duplication of services, and potential ways to generate new funds; and

Inform the next steps in strategic financing for the Children’s Opportunity Alliance, working in partnership with local policymakers, child advocates, business leaders, and other partners to continue to make progress on the shared vision of a well-resourced early care and education system.

DATA ANALYSIS

• MD State and MSDE operating and capital budgets

• Additional MSDE data received through a Maryland Public Information Act Request

• Montgomery County operating and capital budgets

• Montgomery County Public Schools operating budgets

• Montgomery College operating budgets

• City operating budgets: Gaithersburg, Takoma Park, and Rockville

• Expenditure data shared by Montgomery County Office of Management and Budget and MCPS

• A significant amount of healthcare funding, including Medicaid, Child Health Insurance Program (CHIP), private insurance, and family co-pays

• Some food and nutrition programs, including Women, Infant, and Children (WIC) and the Child and Adult Care and Food Program (CACFP)

• Recreation funding in the County, as well as private enrichment opportunities for young children, which are largely funded by parent payments

• Support for families with young children who are experiencing homelessness or housing insecurity

• Pandemic relief funding allocated through the County

Full funding for ECE workforce development across all of Montgomery College’s pathways, as well as at other training and development institutions and providers

• Full funding for all nonprofit programs and services that serve young children, including Early Head Start funding for the Family Services/ Shepherd Pratt program

• All private philanthropic and charitable donations, in particular individual donations, corporation social responsibility, and Community Reinvestment Act funding through banking institutions

• Money that parents spend on family, friend, and neighbor care, otherwise known as informal, unregulated, or unlicensed care for young children
  

• The majority of the money in the early care and education sector comes from families paying to access services.

• This means that families without enough money cannot access necessary or high-quality services, which leaves great disparity and a significant equity gap.

• The majority of funding in the child care industry comes from parent tuition payments.

• The US Administration for Children and Families  recommends that families spend no more than 7% of household income on child care costs to maintain a sustainable household budget; Montgomery County families spend, on average, 27%. 

• Using these averages in 2023, for a family who included a couple with an infant and a preschooler, child care expenses totaled $41,210 for one year.
  

Child Care Costs as Compared to Other Major Household Expenses

• Federal, state, County, and city funding supports programs and services for young children and the adults who care for them. The funding is allocated through public agencies or awarded to private partners through contracts or grants.

• Funding decisions are typically made on an annual basis, so amounts programs receive can fluctuate from year to year.

• Many of the programs designed to serve low-income families have differing eligibility requirements, which leads to complexities that families find difficult to navigate. 

• Programs like the Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) with the lowest income requirements (e.g., 130% federal poverty level) are serving the highest percentages of eligible children, with an estimated 85% or more of eligible children actually enrolled. 

• Given what we know about the Self-Sufficiency Standard, thousands more children in the County are ineligible for these programs, though still experiencing hardship, which leaves large unmet need.

In FY22 and FY23, the State of Maryland and local governments distributed federal pandemic relief funds through a variety of programs, including significant funding through child care stabilization grants, the Maryland Rebuilds grant program, and relief to school systems.  

• Federal relief funds allowed the state to make sweeping changes to the Child Care Scholarship (CCS) program, increasing participation drastically. In turn, payments that went directly to eligible child care providers to cover the tuition of children from low-income families nearly doubled between FY22 and FY23. 

• Montgomery County provides additional subsidies through the County’s Working Parents Assistance Program (WPA), as well as supplementing the reimbursement rate that providers receive for serving children who utilize the state CCS program. These are to account for the higher cost of living in Montgomery County. As the number of families enrolled in CCS grew, the supplements provided by the County also grew. Money for these programs comes from both the DHHS and ECEI budgets. 
  

• There are approximately 27,000 children ages 5 and under in Montgomery County who meet the income eligibility requirements for CCS, and approximately 10,000 who meet the income requirements for WPA.* 

• Of these, it is unknown how many meet all other eligibility requirements, including citizenship/legal residence and parental employment or school enrollment. 
  

• Local education agencies and qualified licensed child care providers can apply to the State of Maryland on an annual basis.

• Community-based providers received Pre-K Expansion Grants from Maryland State Department of Education (MSDE) to operate Pre-K classrooms in their community-based settings. See table on the right.

• For comparison, MCPS also received funding from MSDE through a Pre-K Expansion Grant –  $240K in FY22 and $780K in FY23.

MCPS’s infrastructure and ability to blend and braid funding from multiple sources gives the district an advantage that most private child care providers don’t have.

• The MCPS total operating budget in FY22 was nearly $2.8 billion and exceeded $2.9 billion in FY23:

  • 63% came from County

  • 29% from state government

  • 3% from the federal government

  • 3% from enterprise and special revenue funds

• MCPS blends and braids funding from many sources, for example:

• IDEA-C for special education (amount unknown)

• School Heath Services funding from the County through DHHS (FY22: $1,286,816 and FY23: $1,254,437)

• MSDE Pre-K Expansion Grants (FY22: $240K and FY23: $780K) 

• Infants and Toddlers Program state grant funding FY22: $1.4M)

• Blueprint Pillar 1 allotment $6,512,918 (FY22) and $12,549,473 (FY23)

• Pre-K state formula funding: $17,504,318 (FY23)

• In response to the call for expanded Pre-K, MCPS converts part-day seats to full-day seats.

• The number of children receiving special education services is growing, reflecting a nationwide trend. 
  

• Children’s Opportunity Fund (COF) awarded $251K in grants in FY22 to nonprofits serving children birth to 5 years old. The remaining amount, $258K, was awarded to nonprofits serving children ages 5-12 years old.

• Acknowledging that early care and education is an essential service and economic imperative for the well-being of children, families, employers, and the greater community, the County designated the Alliance as an independent nonprofit legislated to serve as ECE coordinating entity in July 2022. 

• At the start of FY23, COF transitioned to the Alliance and continued the tradition of grantmaking with a modest pot of funds, awarding $155K to nonprofits serving children from birth to age 5. 

• COF/The Alliance blends funding from the County, MCPS, and private philanthropy, which is regranted to nonprofits to support community-based work. 

• In FY22, COF received a three-year grant from MSDE to administer an Equity Afterschool Program benefiting elementary-aged children in two high-needs schools.

• The philanthropic investment in ECE is low, leaving nonprofit providers to rely on County grants and contracts or the donations of wealthy individuals (which requires substantial internal capacity).

• Smaller grassroots nonprofits struggle to get started in Montgomery County.

• There are relatively few nonprofits that focus on early care and education, because many of these services are provided by government.

PRIVATE INVESTMENTS

PUBLIC INVESTMENTS

• Early learning: Support for children in full- or half-day care, thus providing parents an opportunity to work and children an opportunity to learn in a safe environment.

• Family supports and healthy development: Support for parent engagement in their children’s lives and the healthy physical, emotional, and behavioral development of children.

• System building and supports: Support for aspects of the early care system, e.g., federal supplemental relief (COVID) funding, quality improvement, workforce strengthening, parent outreach, access and enrollment, data collection, and collaboration.

• Basic services: Funds that meet basic child and family needs, e.g., food, housing, transportation, and general health services, as well as funding that supports the healthy cognitive, mental, behavioral, and life trajectory development, e.g., TANF, SNAP, education, child care, Head Start, Early Head Start, general family and community supports, general health care, workforce training, and recreation.

• Intervention: Funds that correct or mitigate disparity and/or address population-specific needs that help children and youth to thrive and succeed and includes funding streams with intervention for a specific reason in its description, e.g., early childhood intervention, physical and behavioral health intervention services, and special education.

• Prevention: Funds directed to methods or activities that seek to reduce or deter specific or predictable problems, protect the current state of well-being, or promote desired outcomes or behaviors. This includes funding streams that have prevention for a specific reason in its description, e.g., child abuse prevention, prenatal health (targeted to prevent adverse birth outcomes in a high-risk population).

Early educators and human service professionals advocate for more prevention and intervention funding to support a great start in life, such as more funding for prevention of child abuse and neglect, home visiting, counseling, education and training for pregnant or young mothers, and more funding for children with special education needs.

Takeaways:

• Special education is the largest investment in the system and is a combination of federal, state, and local dollars within MCPS.

• A large infusion of COVID funding attempted to stabilize the sector in FY22 and tapered off in FY23.

• Pre-K is the third-largest investment in the system, funding education within school classrooms and in community-based child care organizations. 

• Nutrition support is essential to ensuring our youngest children’s brains are adequately fueled for learning.

• "ECE seats" accounts for child care seats broadly for birth to age 5 and is not specifically designated for Pre-K. It contains Child Care Scholarship and subsidies for birth to 5.

• The remaining $401M in FY22 and $419M in FY23, not accounted for in this slide, are attributed to parent tuition.
  

• Funding for all young children (0-5 years old) refers to programs, services, and system-building efforts that benefit children, regardless of their age. This includes: library activities any young child can attend, child care subsidies, equity training for providers, and family supports such as food and cash assistance.

• More funding is provided for programs and services that benefit the entire early care and education sector, or children ages 3 and 4 years old – instead of prenatal to 2 years old. This latter group is when 90% of brain growth happens, and it’s crucial that more investments support our youngest children. 

• More funding is supporting all other populations than early care educators and prenatal/pregnant mothers.