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They took out loans just to keep classrooms running. Now, as Pennsylvania’s budget impasse ends, early childhood centers are bracing to repay the debt—with interest.
The Pennsylvania House of Representatives on Wednesday approved a state budget deal by a 156-47 vote that boosts early childhood education funding; Governor Josh Shapiro later signed this into law. The plan allocates $326.8 million for Pre-K Counts and $90.9 million for Head Start programs. This is an increase of $9.5 million for Pre-K Counts and $22,000 for Head Start programs.
“We are disappointed that the final budget fails to offer support for the commonwealth’s Head Start Supplemental programs,” said leaders with Early Learning Pennsylvania. “While the passage of a state budget will send delayed payments to Pennsylvania’s Head Start programs, we should be investing additional dollars to expand this lifeline for children and families.”
While the commonwealth’s main subsidy program Child Care Works has been funded during the impasse, two other programs were not: Pre-K Counts and Head Start Supplemental Assistance Program. The programs provide free pre-kindergarten classes to low-income families.
More than 1,200 Pre-K Counts and Head Start providers have not received state funding since June 30 for over 36,000 pre-k child slots, according to a report by Pennsylvania Partnerships for Children. Head Start providers still received federal funding during this time.
About 95 Pre-K Counts and Head Start providers across 32 counties have collectively taken on nearly $20 million in loans to mitigate the delay in funding, according to surveys conducted in October by Pre-K for PA and Start Strong PA.
More than 4,000 early learning slots across 16 Pennsylvania counties have been affected by classroom closures, delays, or shutdowns, the state Office of Childhood Development and Early Learning reported.
The Red Balloon Early Learning Center in Scott Township got a line of credit – but did not have to use it yet.
“But we are being very cautious with spending and how we are doing things,” said Joanne Thralls, owner and executive director.
She’s limited spending on classroom supplies and placed more emphasis on parent and community donations. The federal government shutdown has put a further strain on resources.
“This is a double whammy. It’s tough,” Thralls said. “We still have mortgage. At any given time, if [the government] said today your funding is over completely, I have a buffer, but that's only going to last so long.”
The Red Balloon receives federal funding for their Head Start program through the Allegheny Intermediate Unit.
“The AIU’s programs and services are a lifeline for students and families throughout our county and beyond. Investing in the individuals who rely on these supports generates lasting educational and economic returns for our entire region,” said Bob Scherrer, AIU executive director.
Thralls said the center was preparing to not host their annual holiday activities, like their free Thanksgiving dinner for children and their families, amid the impasse and hopes state dollars will be distributed as soon as possible.
Emily Neff is the public policy director for Trying Together. The organization provides professional development training for childcare workers in Southwestern Pennsylvania and is a contracted parter with Allegheny County’s Early Learning Resource Center. She said a concern now that the budget is passed is bringing kids back to the classroom.
“Those families couldn’t wait around for the budget; they had to go find another option. Those teachers had to go find another job,” Neff said. “When the budget does finally pass and those funds come, the programs possibly won’t have teachers employed and don't have kids to serve.”
State Treasurer Stacy Garrity announced $500 million in Budget Bridge Loans with lower interest rates for Head Start providers and county governments and expanded it to include Pre-K Counts last month. Those who enter into a loan agreement will be required to pay back the initial Treasury investment plus a 4.5 percent annual interest rate. The loans must be paid within 15 days of state funds being released following the enactment of the state budget.
As of last week, 66 Pre-K Counts and Head Start providers have taken out loans through the program, totaling over $20.7 million, including providers in Fayette and Westmoreland counties.
One of those providers is the Westmoreland Community Action, which provides Pre-K Counts and Head Start programs to about 800 students in 30 classrooms across the county. The organization has laid off 34 staff members, mostly childcare workers, and reduced hours for 150 employees since July, CEO Mandy Welty Zalich said.
The organization took out loans through the state’s program for both Pre-K Counts and Head Start.
“All of the Pre-K Counts staff are coming back to work gradually,” Welty Zalich said. “[Taking out the loan] was a decision of necessity in order to serve our clients and children.”
A total of $3 million in state funds to the organization was put on hold due to the budget impasse, Welty Zalich said. It’s not clear when the money will be available.
“We fortunately or unfortunately have had some reserves and extended our bank line of credit,” she said. “When you're working with families and individuals in the community and know that you just can't meet the needs like you used to be able to or like you want to, it’s very trying.”
If the state budget was not passed by December, they would have had to cut some programs, she said.
Uniontown-based Duck Hollow Discovery Learning Center also took out a state loan for their Pre-K Counts, which serves about 100 students in three classrooms. Owner and Executive Director Rebecca Belski said she has taken out additional loans through family and the bank to sustain services.
“We probably would not be operating right now if we did not have the Budget Bridge loan; our banks and families will only give us so much,” Belski said. “We hope our funding is paid back in one lump sum, so we don’t have to pay as much interest.”
Belski said the center has not been able to offer as many family engagement activities during the budget impasse.
“All of my teachers have been making sure they spend the least amount of money as possible just so they can get by,” Belski said. “It’s been a real stress on all of us, but our community is getting better through early care and education.”
The center would have had to close their Pre-K Counts program in mid-December if the state budget was not passed by then, Belski said.
Erin Yudt is a reporter with Pittsburgh Media Partnership Newsroom, part of the Center for Media Innovation at Point Park University. She most recently was a multimedia content producer and digital reporter at WKBN in Youngstown and is a graduate of Point Park University. Reach her at erin.yudt@pointpark.edu.
The PMP Newsroom is a regional news service that focuses on government and enterprise reporting in southwestern Pennsylvania. Find out more information on foundation and corporate funders here.
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