The Pennsylvania Board of Education’s Pre-K Counts program, which launched in 2007 and helps more than 10,000 students, many of them low income, attend preschool in communities across the state, was slated for a huge expansion. Earlier this year, the state board told child-care providers funded through the program that it was pushing for a $100 million increase, and that schools ought to start gearing up for a jump in enrollment.

Among those providers was Special People in the Northeast Inc. (SPIN), a nonprofit that provides services, including early-childhood education, to people in the Philly area with intellectual disabilities. Kathy Brown McHale, SPIN’s president and CEO, said her organization spent more than $400,000 to renovate a building on Dunks Ferry Road owned by St. Anselm Church in Northeast Philadelphia. SPIN created a space that could hold 120 pre-K students, hired 25 more employees and trained them according to state regulations. SPIN also bought $180,000 in equipment and school supplies.

Renovations to SPIN’s new facility will be completed by Sept. 4, but the pre-K classrooms will likely remain empty much longer. Because the state has yet to adopt a budget, Pre-K Counts providers are not only stuck waiting for funding just to stay in business, they don’t even know how much the state is going to provide under a new budget.

“The people who work here want to work here, and think these jobs are important,” Brown McHale says. “Unfortunately, we have to tell them now that we can’t pay them what we thought we could. On top of that, we have to tell parents now that their kids might not be able to go where they expected.”

According to figures provided by the Delaware Valley Association for Educating Young Children, the need for early childhood care in Philadelphia is so great that Pre-K Counts providers in the city requested more than 4,000 new seats this year — and each of those providers is being held hostage financially until the impasse ends.

The state legislature is currently tasked with putting together a working budget, despite the mile-wide ideological gulf between Democratic Gov. Tom Wolf and the Republican-controlled state legislature. Wolf, elected last November, wants to raise income taxes, and promised during his campaign that he would tax natural gas drillers in the state, two sticking points with prominent state Republicans, including Senate President Pro Tempore Joe Scarnati and House Speaker Mike Turzai.

In theory, the state was supposed to have passed a budget before the new fiscal year began on July 1. But with budget negotiations now at an impasse, lots of state payments, including those to some construction companies and, most notably, $110 million due to human services nonprofits through the end of July, are being delayed.

Though state shutdowns across the country typically last only a handful of months, that revenue loss can be catastrophic for human-services providers like nursing homes and schools, which often rely heavily on state aid, and usually operate on small budget margins. Groups with large cash reserves or diverse sources of income, like construction firms, can typically make it through a shutdown just fine — nonprofits, meanwhile, are often forced to take on hundreds of thousands in loans just to keep their doors open. An August survey conducted by the United Way of Pennsylvania identified 110 nonprofits that planned to take on a combined $1.4 million in loans to stay open until the end of October.

The Pennsylvania Department of Education’s early childhood programs, like the Pre-K Counts program, for example, are funded through a number of complicated grant programs. Some pay individual school districts, who then divvy up money to preschool providers; others pay pre-K programs directly.

The state started the Pre-K Counts program as a way to better fund “high quality” preschool programs in low-income areas, which tend to lack preschools with adequate supplies or well-trained teachers. (The state ranks pre-K programs from one to four stars; “high quality” means three- and four-star programs.)

According to a Department of Education spokesperson, there are currently 13,456 students enrolled in Pre-K Counts programs statewide, and 2,834 in Philadelphia. Even among nonprofits, the state’s early-childhood-education programs are getting hit particularly hard. A July report by the Nonprofit Finance Fund and the William Penn Foundation said that virtually all of the early-childhood education providers in Pennsylvania are operating “close to the financial edge,” regardless of the quality of care they provide. Most providers, the report said, are barely able to break even, and do not have the cash to weather long stretches without much income.

Suzann Morris, assistant director of public policy at the Delaware Valley Association for the Education of Young Children, says that since none of the organizations that applied for new seats will know how many the state will award them until the impasse ends, the entire program has been thrown into disarray.

“This sets the whole school year behind,” Morris says. “Some programs will be scrambling to fill those seats. It’s already an uphill climb — asking schools to wait a couple of months, and then to recapture parents, will be tough. The Pre-K Counts program right now is not very visible to the public. It’s going to be tough to get a full enrollment.”

Statewide, she says, there around 244,000 3- and 4-year-olds who are not enrolled in high-quality, public preschool care (including kids enrolled in both private and low-quality programs, in addition to those who are not getting care), which means the state can’t afford to lose any more seats than it already has. “We’re not really making a dent right now,” she says.

Shawn Towey, the child care policy coordinator for Public Citizens for Children and Youth, which advocates for better education and health-care programs for Pennsylvania children, says the longer the impasse goes, the “less likely it is that new expansion seats will open. If it keeps going, it’s more likely providers will turn away the seats.” They won’t be able to fill them that late in the year, she said, as many parents will have either found different programs, or quit looking for child care.

Most of the schools, Towey says, are still recovering from the state’s last budget impasse in 2009, which lasted more than 100 days. “We lost about one in 10 providers statewide,” she says, adding that she’s spoken to many providers across the state that just finished repaying the loans they took on that year. “Some places closed temporarily, and some parents had to find other arrangements,” she says. “It was pretty devastating.” She says the last impasse knocked out the small cash reserves schools may have had, and severely weakened the industry’s ability to withstand this one.

Tina Viletto, the legislative director at the Montgomery County Intermediate Unit, which runs multiple preschools, said her organization began gearing up earlier this year to take on 730 new students. She spoke with the principals of each of the organization’s schools, who were eager to devote classroom space to the county’s poor youth. “But we’re in a hold status,” she says. “We’re really hoping to have pre-K classrooms up and running, and we’re doing a lot of professional development, teaching staff, keeping aides fully trained, so we can have qualified teachers in the classroom.”

She says her organization is trying to do all it can to be ready the minute the impasse ends, but says starting up again midway through the year will be messy. “If there isn’t a service, it’s very difficult for our lower-income population to find somewhere else to be,” she says. “Some of these children may not be able to find care at all.”

At SPIN, meanwhile, Brown McHale is trying to figure out how her organization can pay its bills until the stalemate ends. Not only did SPIN spend hundreds of thousands to create their new pre-K space, it’s paying monthly rent on the building, too.

“We’re very upset,” she says. “We’re finding assignments for our new staff elsewhere in our organization. They were trained and ready to start teaching little children.”

Correction: A version of this article that appeared in print misstated how many 3- and 4-year-olds do not receive high-quality, public pre-k care in Pennsylvania. That number is around 244,000, not 300,000. There are 300,000 total children of preschool age in the state.

Philadelphia City Paper – September 2, 2015 – Read article online