Business leaders back early education as economic development

Jim Clair says four years ago he was probably the least likely person to become involved in early childhood education.

"I was just a guy running a company," says Clair, the CEO of Goold Health Systems, a $21 million health care management company in Augusta that employs 200 people.

That all changed when he was appointed by then-Gov. John Baldacci to participate in a business roundtable discussion about early childhood investment. Clair says he accepted the invitation "out of a sense of civic duty," but what he learned turned him into an advocate.

"I had my own little a-ha moment," he says.

That moment was spurred by a report indicating 90% of core brain development occurs by the time a child is 3 years old, yet only 4% of education spending occurs during that period. Children who are nurtured and educated during those formative pre-kinder­garten years are more likely to succeed in school and the workplace, while those who are not require more public assistance throughout their lives.

"That was pretty compelling," says Clair.

Now, Clair is leading a group of business leaders on a mission to improve the quality of early childhood care and education, while expanding access to top-notch facilities for all Maine families, especially families with low incomes. The Maine Early Learning Investment Group is preparing to launch a fundraising campaign to put some monetary muscle behind its mission. The intent is to direct public awareness and private funds toward solving a problem usually regarded as a social justice dilemma rather than an economic development opportunity.

"We see this as an economic imperative," says Clair. "Maine's work force — we need to be highly skilled, innovative and well adjusted and educated if we are going to successfully compete in a global economy."

The group of eight CEOs was assembled by Steve Rowe, Maine's former state attorney general, who has long advocated for larger investments in early childhood education. Rowe says he became interested in the issue while he was attorney general. Many of the underlying factors of crime, abuse and neglect seemed to stem from childhood experiences, he says.

"As Maine's attorney general, I witnessed time and again the devastating consequences of adverse childhood experiences — not just when people were young, but throughout their lives," says Rowe.

Rowe says he selected MELIG members because they are well-respected, dynamic leaders who are committed to increasing the quality and quantity of early childhood development. They represent a diverse cross-section of industries and view early childhood education through an economic, rather than a social services, lens.

"I looked for individuals who already knew about this issue and appreciated it," says Rowe, who hopes to add members to the group. "It's viewing (early childhood investments) as an economic initiative. It's focused clearly on improving the quality of our work force."

Clair, MELIG chairman, says the group had its first official meeting last month. He's hopeful it will develop a solid business plan to raise millions of dollars annually to improve the quality of early childhood education and increase access for all Maine families, particularly those with low incomes. The money would likely be directed toward scholarships for young children of low-income families, and toward professional development of early-childhood educators.

"A wise investment is to deploy resources when they're going to be used at their most efficient and effective," says Clair, noting the concentration of cognitive development in preschool children. "So, it's kind of a business logic for us in many ways."

Currently, the state invests a small amount in early childhood learning relative to its overall education budget. Gov. Paul LePage's biennial budget devotes about half, $3.1 billion, of the state's $6.13 billion, to kindergarten through college education. Only $6.45 million of the state's General Fund annually is directed toward pre-K education, through Head Start, child care subsidies and family visiting services, according to the Department of Health and Human Services.

Although experts believe the foundation for learning is laid well before children enter kindergarten, pre-kindergarten workers are paid at a much lower rate than other teachers and do not have the same incentives for professional development.

Rowe notes that accredited early-childhood professionals are paid about $26,000 a year, while K-12 educators are paid on average $46,000 and higher-ed professors are paid more than $60,000 on average.

"We can have a world class K-12 education system," says Rowe, "but unless children start kindergarten ready to learn, we will never see world-class results."

That's where MELIG comes in, creating a fund that will compel pre-K centers to increase the quality of educational programming and make it easier for low-income families to pay for those services. Clair says MELIG does not want to reinvent the wheel by creating a new nonprofit. Instead, the group will rely on the Maine Community Foundation and the Maine Development Foundation to receive, hold, invest and administer the funds.

"We feel really good about that — that it will be a lean organization that can really focus in on our core objective of raising funds and administering funds in a way that is going to stay 100% here in Maine," says Clair.

That will allow the business leaders to do what they do best: build and execute a successful business plan.

It takes a village

MELIG member Chris Emmons, CEO of Gorham Savings Bank, says he is excited to be part of MELIG. The caliber of the executives assembled by Rowe gives it a high probability of success, he says. "It's a powerful group of people who have a track record of getting things done," says Emmons, who joined to help ensure Maine has a well-prepared work force.

The group recognizes that adverse childhood experiences — such as neglect, abuse or exposure to substance abuse — can and does often increase high-risk behavior and chronic adulthood diseases. These experiences can result in "toxic stress," which can affect fundamental brain development and lead to health problems later in life. Ac­­cord­­ing to a study by the U.S. Centers for Disease Control and Prevention and Kaiser Permanente, toxic stress can increase rates of alcoholism, heart disease, liver disease, diabetes, depression and more.

These conditions come at a cost — for the state and employers. Maine's social and economic costs are about $300 million annually for special education; $60 million for child mental health services; $160 million for corrections; $900 million for substance abuse and $1 billion for domestic violence.

There's a consensus among the group that without investments in a child's early learning, emotional, physical and social needs, the cost of doing business in Maine will only increase, whether through an unproductive work force or increased health care, welfare and other social costs.

Emmons says the group will likely look at state agencies and nonprofits to figure out how its help can have maximum impact.
"There are a lot of touch-points along that spectrum on how to get [help to] that kid who is in a difficult situation," says Emmons. "How do you reach in there and give that kid a fair chance?"

Emmons and Clair say the solution is not a quick fix, since it will take years before measurable results would be realized. But Emmons says a community bank is uniquely positioned to take a long view when measuring returns.

"You can take a long position where you can invest in that early stage and perhaps not see the kinds of returns of what that investment is going to look like until many years down the road – 15, 20 years down the road," says Emmons.

Early learning and its price

Recently, business leaders have been paying more attention to early childhood development. The Maine Economic Growth Council recently included fourth-grade reading scores as one of the 25 indicators in its annual Measures of Growth report.

Although the 2012 MEGC report will not be released until March, the 2011 report red-flags fourth-grade reading scores needing attention, along with cost of doing business, health care and research and development expenditures. Only one-third of fourth-graders read at a proficient level, the report states.

Meanwhile, the Maine Development Foundation's and the Maine State Chamber of Commerce's third installment of their "Making Maine Work" report homes in on early childhood education. Two previous efforts focused on lowering business costs and improving post-secondary education, but the most recent report looks at pre-K education investments as economic development.

Laurie Lachance, MDF executive director, says if children have not begun to develop basic literacy skills before they enter kindergarten, they will struggle to, and perhaps never, catch up to their classmates. The report, along with the leadership of MELIG, will help spotlight what she calls a missed opportunity.

"We believe so strongly we're missing the mark if we don't put heat and light in this issue," Lachance says.

The report states that every dollar that is invested into quality childhood education will save $16.14 in the form of lower crime costs ($11.35), lower special education costs ($1.55) and increased earnings ($3.24).

Maine is a state with a high level of poverty and many children at risk. Lachance notes that 21% of kids under the age of 5 are in poverty and 20% are classified as working poor. Meanwhile, only 30% of kids eligible for Head Start actually enroll.

Lachance laments that the fourth-grade reading score is the first true assessment of a child's early development. She believes an entry-level kindergarten assessment is needed, so struggling children can get help sooner. She also believes a "global budget" for education, covering birth through college, is needed.

"We're only scratching the surface of what we can do for (kids)," she says.

Lachance applauds MELIG's work to help early education providers, especially independent day-care facilities, increase the quality of their programs. She points to the ratings scale used by DHHS as an opportunity to motivate day-care operators to provide better care and education. The Office of Child and Family Services re­­quires certain day care centers — Head Start facilities and providers receiving subsidies like Child-Care Development funds — to participate in its four-step rank­­ing process, Quality for ME. The program encourages centers to increase quality programming by offering incentives and to provide parents with real measures of quality. For instance, Quality for ME providers are eligible for help to pay accreditation fees and can receive scholarships toward childhood education degrees.

The state ranks the centers on a scale of one to four, with one being the most basic standards of care and four being the highest. According to DHHS, about 1,030 centers participate in the Quality for ME program; 599 have received a step one rating, meaning they have been licensed for a year with no serious violations. Two-hundred-fifty seven centers received step two and step three ratings, indicating they offered varying levels of education and assessment.

Only 173 centers have earned step four, meaning they have highly trained staff, conduct regular assessments and work closely with parents.

Creating demand

MELIG members are careful to point out that the group is not looking to the Legislature for funding. Instead, it is focusing on bringing public awareness, and private funds, to help create change.

While state legislators struggle to close budget deficits, Clair says the key to MELIG's approach is seeking a market-driven solution. That begins by creating a demand for better early learning experiences for children.

"If we can increase the quality of child-care opportunities, that's going increase the demand for those high-quality opportunities," says Clair. "We are very keen on a market-driven approach to this."

Clair said he expects it will take about six months before MELIG is ready to begin fundraising, which means scholarships and incentives would not be awarded before 2013. He says the group will only support programs and initiatives that have a measurable return on the investment and can be replicated throughout the state. The group also wants accountability, he says.

"We know our approach will be very business-like — if something is working, we're going to look to replicate it; if something's not working, we're going to cut it short," says Clair.

"In many ways, I consider this a very forward-thinking initiative," he says. "We're really trying to think about where we want to be 15, 20, 25 years from now as a group."