In a previous post, I argued that even with states facing short-term and long-term budget issues, states could choose to invest more in early childhood programs. What is the evidence for this argument?
Even in state budget crises, states are able to make strategic budget choices to free up expanded resources for whatever the state deems to be its highest priorities. For example, here in Michigan, Governor Rick Snyder recently proposed his fiscal year 2012 and 2013 budget. Even though the state already faced a projected $1.4 billion deficit for its general fund for FY 2012, Governor Snyder chose, as he had promised during his campaign, to adopt reforms to the state’s main corporate tax that would cost about $1.8 billion in revenue.
As explained in the Governor’s Executive Budget, the belief is that this new business tax system will be “simple, fair and efficient” and will therefore “enable all businesses and industries, large and small, to grow and create jobs” (p. A-5, Executive Budget, State of Michigan, Fiscal Years 2012 and 2013). Based on this belief, the budget makes some very tough choices to free up the $1.8 billion needed to reform the state’s corporate tax structure. For example, the budget eliminates various individual income tax credits and deductions, which increases revenues by $1.7 billion. This includes eliminating Michigan’s unusual exemption of most pension income from income taxation.
The budget also maintains the state’s current $110 million in spending devoted to state-funded pre-k education. For advocates of early childhood education, this maintenance of current spending levels is clearly welcome, instead of facing budget cuts.
On the other hand, I estimate that it would cost about $300 million annually for the state of Michigan to have universal access to pre-k education for 4-year olds. If Michigan can find $1.8 billion to lower business taxes, it clearly would be fiscally feasible to find $300 million to move to universal pre-k. The issue is simply one of budget priorities.
Similar calculations can be done for other states. Governors and state legislatures frequently propose large changes in tax policy that reduce tax revenues by far more than the cost of even far-reaching expansions of early childhood programs. These proposals for tax reductions are made even during times of budget crisis. States can afford to invest in early childhood programs if they choose to make such investment a priority.