“When I started in this field 12 years ago, the teachers were making $10 an hour. Now they expect to make $16, and we have a child care shortage in South Austin,” said Gardner. The Rising Star accreditation meant a certain number of teachers would need to have a degree, and the extra funds allowed her to cover their time in school. The process took a year, and now House of Little Angels Learning Center has received the accreditation.

But the ARPA funds for child care in Texas have run out. And Gardner, like providers all over the country, are wondering how to pay their teachers their existing salaries without raising tuition prices beyond what parents can afford. And though Texas had $33 billion in surplus funding, there wasn’t the political will to give it directly to the providers.

Enter Proposition 2: Texas’ plan to help child care providers like Gardner by waiving property taxes. Though Proposition 2 has a number of hurdles for providers to clear in order to qualify and receive payment, Gardner estimates that she will save $5,000-$7,000 per year when the proposal goes into effect in South Austin.

Property taxes play an outsize role in Texas as compared to other states, since Texas does not have a state income tax. Taxes are collected through property taxes and sales taxes, which are higher than many other states to make up for that shortfall. “We were reading the political tea leaves, and the money was being given back to Texas citizens in the form of property tax relief,” said Kim Kofron, senior director of education at Children at Risk, which advocates on behalf of early childhood education in Texas. “So that’s when we decided to see if property taxes might be a way for child care providers to get a break.”

The property taxes include three buckets: city, county and independent school districts. Kofron and her coalition came up with a proposal to provide city and county property tax relief to child care providers – but left the school district taxes intact. “We didn’t want to be in a position of robbing Peter to pay Paul,” said Kofron.

There were heavy negotiations on the proposal, entitled “Proposition 2.” For example, a requirement was added in that the child care centers eligible for property tax relief needed at least 20% of their students to qualify as low income. (Kofron estimates that approximately 2,700, or 40% of all child care providers in the state, would meet that criteria). Child care centers that rented from landlords would be entitled to the property tax savings as a direct pass-through. And the legislation signed into law was just the first step of many. As a change to the state’s property taxes, the legislation was required to be approved as a constitutional amendment. It was signed into law by the governor in May and set to appear on the statewide ballot for a vote in November.

Kofron and her team toured the state, organizing people connected to child care to get out the vote and educate communities on the importance of Proposition 2. But even they were surprised at the groundswell of support when the measure passed by 65% of the vote, winning nearly every county in the state, including places that tended to vote strictly conservative. But this was just the second step of the process. The constitutional amendment and legislation allowed cities and counties to decide if they wanted to provide the property tax and relief, and at what rate. Austin was the first jurisdiction to take up the measure, passing it on November 9, two days after the statewide vote on November 7. Still, other cities and counties are just beginning that process, and others may not take it up at all.

The uphill battle is for Kofron and her team to crisscross the state to advocate for cities and counties to decide that child care providers be exempted from property taxes. But even those exemptions are unevenly distributed. Property taxes are calculated using a variety of factors, including the appraised value of the land and whether it is in or outside of the city limits. Child care centers in nicer buildings within city limits have the potential to reap many thousands of dollars for property tax relief — Kofron estimates as much as $30,000 per year for one center. But places in older buildings, or in smaller plots of land and in counties with lower taxes may see only a few thousand dollars in return.

The actual impact will vary widely depending on the child care facility’s location and property tax burden. “It can be a small bite of the apple, but it also can make it easier for child care facilities to qualify to acquire their own property,” said Ed Wolff, a board member of Children at Risk and president of Beth Wolff Realtors in Houston, who was involved in the Proposition 2 effort. A reduction in property taxes helps a small business owner lower its debt-to-income ratio, and in areas where child care is most needed, “revenue is lower and the costs aren’t necessarily less,” said Wolff. He cites the example of urban areas going through gentrification and modification, “The appraised value [of the property] is escalating rapidly, and yet the people’s income is not.”

For a low-margin business like child care, every savings helps. The providers Kofron talked to plan to use the funds to avoid raising tuition for families, invest in their staff and improve the experience for their students. But it’s a herculean grassroots effort to pass legislation three or four times — especially when doing so may only yield less than a month’s worth of child care expenses.

“This is not the silver bullet, this is not going to fix child care, it is not going to replace the ARPA dollars that are no longer there. But this is a step forward. Sixty-five percent of voters said yes to child care,” Kofron said. She points out that the majority of the voters were 50 years or older, and half had voted in the Republican primary. “This measure was not passed by a majority of Democrats,” she said. “Citizens across Texas, those that are 50 years or older, said yes this is something we need to do.”

Kofron acknowledges that it would have been far easier on the child care providers and the organizers if the state had given some of that $33 billion in surplus funds directly. Such funds could have helped stabilize the industry, expand capacity or pay staff a livable wage which could reduce turnover burnout. Though there is one significant advantage for the property tax measure: “It lasts for the future,” said Kofron. “It’s not one and done.”

The historic amount of ARPA funds made a significant difference for the child care industry, which was in a precarious position before the pandemic only to be forced to deal with subsequent closures during the emergency phase. But as the ARPA funds end, the child care industry is forced to come to terms with how to survive without that influx of funding, and state efforts like Proposition 2 in Texas may be a lifeline — albeit a small one — to keep the doors open.

“We don’t think that there is a single strategy that is going to solve the child care problem in the country,” said Linda Smith, director of the early childhood initiative and the Bipartisan Policy Center. In a place like Texas — which has some of the lowest funding per child for early education in the country — child care advocates were up against a legislature that had $3 billion to spend and yet wasn’t prepared to support direct payments to providers. “The tax provision was more understandable and cleaner,” said Smith. It became a matter of asking, “what is going to work in that state?”

Kofron’s efforts on Proposition 2 are far from over. Since the measure requires the approval of local jurisdictions, she and her team will have to traverse the state once again, coming up with toolkits and arranging conversations with city council members and county commissioners about taking up the property tax proposal. But engaging with local leaders, especially in parts of the state that have been less engaged on the issue such as East and West Texas, the panhandle or the Rio Grande Valley, can lay the groundwork for future mindset shifts. “It’s really going to force our hand to have conversations in communities where child care may not be on their city or county radar.”

Smith believes there is no one-size-fits-all solution to the nation’s child care crisis. Even robust subsidies to providers come with challenges, as subsidies on their own do not create more supply. Instead, what’s needed is a combination of direct support to parents, tax policies and paid parental leave policies, which can take some of the stress off parents for returning to work, and alleviate the demand for infant-care, which is often the costliest and hardest form of child care to find.

“It will be interesting to see what will happen by taking property taxes out of the equation for child care programs. Will that expand their supply or keep fees low for parents, and what is the impact on the child care program itself?” Advocates in the child care space will be keeping an eye on the impact of Texas’ Proposition 2, to see if fees were changed, care expanded and supply shifting at all.

For Alejandra Gardner, some relief is better than nothing for her child care center. She worries what will happen when the funding stream from ARPA is completely gone and the property tax relief hasn’t yet kicked in, and how she will maintain the staffing levels needed so as not to stress her small team. “It’s a hard job with a lot of turn-over,” Gardner said. “I tell our teachers it’s ‘a hard job and it’s a heart job.’ A lot of teachers have the heart for it, but when their pay doesn’t match up with what they need, they have to leave to do what is best for their family.”

With 70% voter approval, Amendment 1 changes the state constitution to guarantee a right to child care and early education. That promise includes siphoning around $150 million a year from New Mexico’s Land Grant Permanent Fund, which generates billions of dollars from the state’s oil and natural gas fees, toward early childhood education.The fund already allocates 5% of its revenue to the state’s public schools, hospitals and universities. Now an additional 1.25% will fund early childhood education.

While an overwhelming majority of voters favored the amendment, early childhood education advocates in New Mexico fought a decade-long political battle just to get the measure on the ballot in the first place. This success is credited to a decade of advocacy, community organizing, electoral work, partnerships and alliances, a One Thousand Kid March and “circle-time sit ins.” It was heavy lifting.

New Mexico’s constitution can be amended if a majority of voters approve of the amendment by ballot measure. But before that question can be put to voters, it must first gain a majority vote by legislators in both the state house and senate. That proved challenging for advocates like Andrea Serrano, executive director of OLÉ, a progressive nonprofit based in Albuquerque that has advocated for workers’ rights, fair wages, paid sick leave and early childhood education.

“I think that there were long-time, very powerful senators who practiced the politics of austerity,” she said. “They did not think that expanding the permanent school fund was something that they were going to allow to happen.”

Serrano’s colleague, OLÉ Education Fund executive director Matthew Henderson, had tried engaging in direct action by disrupting committee hearings. But OLÉ and other progressive organizations in New Mexico only found success after state politicians who had blocked the measure lost their re-election runs.

OLÉ teamed up with left-leaning activist groups including the New Mexico Working Families Party, the Center for Civic Action and ProgressNow New Mexico to form No Corporate Democrats. The group’s fiat during the 2020 election was to unseat then-state Senator John Arthur Smith, who had chaired the Senate Finance Committee. The southwest Democrat once described the proposed fund distribution as “fiscally irresponsible.” The measure passed six times on the House side but Smith killed it each time it entered his committee.

No Corporate Democrats also targeted Senate Pro Tempore Mary Kay Papen, Senate Corporations Committee Chair Clemente Sanchez, Indian and Cultural Affairs Committee Chair Gabriel Ramos and Senator George Muñoz. The progressive group was successful in unseating all but one senator, Muñoz, who took over Smith’s former chair and approved the ballot measure legislation in 2021.

“Ultimately only one thing really changed things,” Henderson said. “Continuing to organize and build enough political power that we, as part of the coalition, unseated John Arthur Smith in the Democratic primaries in 2020 and four other powerful senators: the Senate pro tempore and in the Senate Corporations Committee chairman. And, by removing these obstructionists, we were then able to pass the constitutional amendment out of the legislature the following year.”

Erica Gallegos is co-director of the Child Care for Every Family Network, a national network of community organizations like OLÉ and Family Forward Oregon, as well as larger organizations like the SEIU and AFL-CIO. Before Gallegos was looking at how to replicate New Mexico’s success in other states, and possibly the federal level, she worked on labor organizing in New Mexico and fought to get the constitutional amendment on the ballot.

“It really took community organizing going into the community, talking to folks, organizing with parents and providers to build power across the state and really change the narrative on child care in the legislature and to really make it a top priority,” Gallegos said.

The electoral work to replace the Democrats who blocked the amendment went hand-in-hand with advocacy work, Gallegos added. OLÉ joined a coalition called “Invest in Kids Now” that pushed for the amendment. Its members included home visitor providers, churches and social justice organizations.

In an effort to persuade legislators, early childhood education advocates took their classrooms to the state capitol. In 2020, advocates bused in hundreds of children from across the state for the One Thousand Kid March in Albuquerque to demand funding for early childhood education.

“Oftentimes child care providers would invite legislators to come into their classrooms to see that children are learning, that it’s not babysitting, and sometimes folks wouldn’t show up,” Gallegos said. “So one year we did what we called ‘circle time sit -ins’ where child care providers and the children would go and in different places in the Roundhouse [the state capital] and just hold a circle time like they would in their classroom.”

Early childhood advocates in New Mexico may have a unique advantage over other states when it comes to finding funding for their program; the land grant fund is the in the country. Jennifer Wells, director of the economic justice team at Community Change, a national progressive community organizing group, understands that while not every state has such a generous land grant, New Mexico’s grassroots organizing can still provide a template for other states.

“What does it look like to amend your state constitution to actually include the early years of education? What does it look like to construct an early childhood trust fund that can capture unspent state dollars, growing that over time and that being a dedicated, stable funding source?” Wells said. “What does it look like to have a department that is actually overseeing early education and care funding in dollars?”

The path at the federal level

At the federal level, funding for universal pre-K faces a tougher road. Shortly after President Joe Biden unveiled his $1.8 trillion American Families Plan in April 2021, a Morning Consult/Politico measured public support on the spending measure and found that 63% of voters supported free preschool for 3- and 4-year-olds. The same poll found that 64% of voters supported another provision in the plan that would guarantee that low- and middle-income families pay no more than 7% of their income on child care.

But by the time Congressional leaders negotiated the Inflation Reduction Act this summer, universal pre-K and lower child care costs fell on the chopping block.

“We only came up short on the federal level by a couple of votes and that did not deter us,” Wells said. “What we know is that we’re still moving for a federal win. When we don’t necessarily get that, we fall back in with our partners and talk about what can happen on the state and local level to keep momentum going.”

Despite approval from a majority of voters, the current Congress seems inhospitable toward any bills promoting federal support for child care. The cuts in the Inflation Reduction Act marked the ninth time in less than three years that Congress removed measures in a bill aiding women and families, according to a of data from the Congressional Budget Office and Congressional Research Reports.

“Anyone who believes that this can be done without real political power behind it is going to be disappointed,” Henderson said. “Just the fact that child care wasn’t ultimately included in the Inflation Reduction Act is another example of how child care still doesn’t have the political power behind it yet to become a top priority.”

Gallegos argues that even after the success of the New Mexico’s ballot measure, the state needs additional funding from the federal level to support early childhood education. She noted that in 2022, to families earning up to 400% of the federal poverty level, roughly $111,000 a year for a family of four. The latest U.S. Census data shows that at least live below the poverty line. New Mexico ranked 50th in the country for overall child well-being, according to a 2022 ranking compiled by the . The same ranking found that 56% of children between the ages 3 and 4 did not attend school.

“We’ve estimated that New Mexico needs an additional $400-500 million annually to fund universal, high quality, early childhood education,” Henderson said. “So, New Mexico is still going to have the need for greater federal investment to really build the kind of child care system we all want. But with passage of the constitutional amendment we’re a lot closer to that goal.

Early Learning Nation: Sara, thank you for coming to the Early Learning Nation studio. It’s great to have you.

Dr. Sara Watson: I’m thrilled to be here.

Early Learning Nation: Big conference, how’s it going?

Dr. Sara Watson: It’s wonderful. The Global Business Summit on Early Childhood is the only convening in the world that is just for business people, to teach them how to become champions for early childhood. We have more than 200 business and civics leaders from 16 countries who are learning about what their peers in the business world are doing, what the latest economic and brain science evidence says, and what they can do when they go back home.

Early Learning Nation: Give me a brief description on ReadyNation, and why are you hosting this conference?

Dr. Sara Watson: ReadyNation is a business membership organization that supports executives to advocate for the future workforce. We help business leaders talk to policy makers about the need for public investments to help kids grow into successful adults, starting at the very earliest ages.

We do this convening so that we can find new champions and give them the tools they need to make the case on an economic basis, not on a charity basis or on a philanthropic basis, that investing in the next generation is essential for business growth.

Early Learning Nation: I want to talk to you about the individuals, because in the end, it’s business leadership. It’s individual leaders, and you’ve got them here at the conference. But you were touching on a point, incentives for business, interest for business writ large. Why are businesses becoming champions of early childhood development?

Dr. Sara Watson: Businesses are coming to realize that they cannot depend on the system that we have now to produce the job ready adults that they need. One of our wonderful champions is Jim Spurlino, the CEO of Spurlino Materials in Ohio, which makes concrete. He talks about the fact that, in any building, you need to have a good foundation, and if he doesn’t pour good concrete, you don’t want to be in that building.

Early childhood is the same way. They really understand that, just like in any other process in business, if you want a good result, you need to start early in looking at how things get started, and children are the same.

Early Learning Nation: Do they see purely long term investment? Do they see short term benefit? And how do they balance the short term versus long term, which just in a business mode can often be hard, and here we’re talking about early childhood development? How do they balance short term and long term?

Dr. Sara Watson: One of the great things about the field of early childhood is that you can have your cake and eat it too. There are many studies that show the short term benefits of good early childhood interventions. It improves health. It reduces emergency room visits. It reduces child abuse and neglect. It reduces special ed placements starting in the early years, and it also has those long term benefits of helping young adults do better in school, make better choices, do better in the workplace.

Now, those early benefits don’t necessarily accrue directly to business, but they do effect the quality of life in the communities where they operate, and it also determines whether our public dollars are going to be spent more on the prevention end or more on the back end when it’s much more expensive.

Early Learning Nation: And obviously, community and social responsibility for businesses is just one of the drivers that many of them are getting measured on, and investing back in their communities makes total sense. Let’s talk about some of the individuals, because again, you’ve got a big room filled with people and a lot of presenters as well. What are some examples that you have … I assume that they’re going to be ReadyNation members, I would hope, but of individual business leaders who are doing something special, interesting, unique around early childhood development?

Dr. Sara Watson: Well, one individual that just got our Business Champion For Children Award is Mike Petters, the CEO of Huntington Ingalls, the largest military ship builder in the United State, and he personally supports early childhood programs as well as being a champion for young children generally. And what he says in terms of the long term is that, pretty soon, he’s going to launch a new aircraft carrier.

That aircraft carrier is going to come back to that shipyard in 25 years to get retrofitted, and in 50 years, it’ll come back to be disassembled. He knows today what type of employee he needs 25 and 50 years from now, and so those are the two and three year olds that are running around Newport News, so he really cares about how those children are going to develop.

And I’ll mention another wonderful company we work with is Vanguard, the investment firm. The former CEO of Vanguard is one of our best champions. The current chief investment officer just spoke at our conference. They have made early childhood one of their corporate priorities, so they are investing in a wide range of strategies to improve early childhood.

Early Learning Nation: With these business leaders, do you find that it’s more than just a business connection for them? Is there something personal for most of the folks who really get involved?

Dr. Sara Watson: One of the wonderful things about the early childhood field is how much people intuitively understand these days about the importance of early learning. If you have a young child, if you have a young grandchild, if you have just a child in your family generally, you can see them learning from the very earliest ages, and so they understand at a very personal level that their children are probably going to be okay. They’re going to be read to and sung to and held and nurtured from an early age, and so they understand that not all children get that, and they want other children to get what their children have.

Early Learning Nation: Is the role for business in early childhood development, is that only a big business thing? You’ve mentioned a number of very, very large companies. Or can midsize and smaller companies get into this game as well?

Dr. Sara Watson: The wonderful thing about our field is that there is a menu of things that businesses can do, including very small businesses. We talk about getting active in your community. You can do that one-on-one. Getting the message out through your customers, social entrepreneurship, developing products that support early childhood and make money, speaking in the media, which we have many business leaders that sign op-eds with us or do letters to the editor or appear in the media of all sizes. And then there’s direct advocacy.

And policy makers want to hear from their constituents. It’s more important to them generally to hear from a small business owner who is actually in their district than some CEO of a giant company that’s far away. Sometimes those small business owners who went to high school with their member of Congress or who have known their legislator since they were a young person can have a huge influence because they have so much direct credibility.

Early Learning Nation: Sara, thank you for coming by our studio, and thank you for inviting us to your wonderful conference.

Dr. Sara Watson: It was wonderful to be here. I’m so thrilled for Early Learning Nation to have such great visibility here. Thank you.