Free our Children’s Potential, Not the Cash

John Edward teaches economics at Bentley and UMass Lowell. He’s a frequent contributor of columns on economic issues. Here is his latest:

There are 310 school districts in Massachusetts. Only 12 do not offer full-day kindergarten. Chelmsford is one of the twelve.

Meanwhile, one Chelmsford Selectman is proposing a tax rebate. Most of the money would go to well-off property owners. We should reject such misplaced priorities.

In my last column I discussed how education could be the great equalizer. The key is starting at a very young age.

In Chelmsford, full-day kindergarten is only available to those who can afford a private school. For students in Chelmsford’s half-day kindergarten, parents have to pay $3,400 per school year to get just childcare coverage for the rest of the school day. Tuition for full-day kindergarten at the Montessori school is $15,100.

Chelmsford school officials would like to establish a full-day program. A feasibility committee estimated a cost of $936,000 for the first year of tuition-free full-day kindergarten. They identified funding for the first year. The School Committee voted to delay implementation because some of the money may not be sustainable.

The feasibility committee acknowledged the evidence that full-day kindergarten is good for children, schools, teachers, and parents. Among the many benefits they cited:
• Academic achievement improves.
• School systems save money due to “reduced retention and remediation rates.”
• Teachers have fewer students and more time for individual and small group instruction
• Parents save money on private school and childcare costs.
• Lower-income families have a school they can actually afford.

I would add that taxpayers benefit when all children in our community have an opportunity to achieve their full potential. Homeowners will benefit from higher property values if the town’s school system improves.

According to the Children’s Defense Fund :

Investments in early childhood are vital to the success of our nation’s youth. Extensive research has shown that early childhood programs significantly increase a child’s chances of avoiding the prison pipeline. Furthermore, these programs have well-documented economic and societal value. Studies have shown that investments in quality early education can produce a rate of return to society significantly higher than returns to most stock market investments or traditional economic development projects.

When you think about it, the fact that there is a need for an organization such as a “Children’s Defense Fund” says a lot about misplaced priorities.

Child development experts have identified education gaps in children as young as 18 months. Level of income strongly influences childhood development. Development gaps are very hard to make up for in later school years.

Promoting inequality by not having full-day kindergarten is unjustifiable. The debate in Chelmsford should be how to provide pre-kindergarten, not whether to have full-day kindergarten.

Meanwhile, one Selectman, a former member of the School Committee, is proposing the town give “free cash” back to homeowners as “tax relief.” Free cash is money left over at the end of the fiscal year. Free cash includes revenue in excess of projections. Free cash includes spending less than budgeted.

According to the Massachusetts Department of Revenue, “under sound financial policies” towns will generate free cash. Chelmsford’s projected free cash for the current fiscal year is almost 1 million dollars. Free cash results from responsible fiscal management.

The Selectman is proposing the town allocate “At least 50% of the certified free cash to provide property tax relief.” The proposal is fiscally and morally irresponsible.

The Selectman who put forth the proposal cited a property tax rebate of $70. That number is very misleading. It assumes the town distributes all $1 million of the projected free cash. Further, $70 is an average, not the amount homeowner’s would actually receive.

One colonial on Westford Street I looked up in the Assessor’s database would get $75. A split-level on Chelmsford Street would get only $37; a mansion on Zeus Drive — $235.

Commercial property owners would receive a rebate as well. The owner of the property where Wal-Mart is located would get $3,458.

The median household income in Chelmsford is $92,549. That means at least half of the households make enough money that they should not need a tax rebate. For the 28.5 percent of Chelmsford households that make less than $50,000, the rebate will provide little or no relief.

Due to sound financial policies, Chelmsford has ended the year with free cash ever since Town Manager Paul Cohen took over. Going back over thirty years the town ended up with a deficit only once. In some years the amount of free cash was much larger than $1 million.

Sometimes the town applies the money to replenish the stabilization fund (also known as the rainy-day fund). This year the Town Manager recommends adding the money to a trust fund for unfunded liabilities related to employment benefits. Both are good choices.

Giving back free cash is a misguided approach to providing “tax relief.” It panders to the always-present voting bloc that complains about taxes. It neglects and in the end burdens the Chelmsford residents who really need relief.

Towns have a lot of flexibility for what they do with free cash. The town can appropriate spending on programs by a majority vote of town meeting. The town could put the money in an education Stabilization Fund and then allocate it by a two-thirds vote.

The School Committee has identified full-day funding for one year. The amount currently projected for free cash could, by itself, buy us another year. Based on the recurring revenue the School Committee identified, $1 million could buy us at least two more years. That would give them three years to develop a “sustainable” solution.

The Commonwealth of Massachusetts should do more to support early education. The state should mandate full-day kindergarten for all, and eventually pre-K. Still, 298 school systems in the state have found a way to do what Chelmsford has not been able to do.

Hopefully the Board of Selectman will reject the free cash proposal. Hopefully they will work with the Town Manager to help the School Committee identify funds to provide free full-day kindergarten. Hopefully Chelmsford will find its misplaced priorities.

One Response to Free our Children’s Potential, Not the Cash

  1. Matt Hanson says:

    Hi John,

    I just wanted to leave a quick comment stating that I agree full-day kindergarten should be a priority. I spoke in favor of full-day K at the last Tri-Board meeting in Chelmsford between the Board of Selectmen, FINCOM and School Committee. We need to find a way to fund this. I agree with your statement that we should not be debating “if” we will have full-day K. We should be debating exactly how we will implement and fund it.

    Best,
    Matt