Multnomah County's Preschool for All program is facing a critical financial challenge, according to a recent study commissioned by the county's Board of Commissioners. The study, conducted by Prenatal to Five Fiscal Strategies (P5FS), reveals a significant gap between the costs incurred by childcare providers and the reimbursement rates set by the county. This discrepancy has sparked concerns among providers and could have far-reaching implications for the program's sustainability and the state's tax base.
The Reimbursement Gap
The study highlights a stark disparity in reimbursement rates, with the county falling short of covering the true cost of care for preschoolers. In the 2025-2026 fiscal year, the county reimbursed childcare center providers $17,532 per seat for a six-hour day and $25,008 for a 10-hour seat. However, the true cost of care per child varies, with estimates of $20,253 for childcare centers and $16,784 for family childcare. This means the county under-reimbursed childcare centers by $2,721 per student and over-reimbursed family childcare by $748.
The situation is even more dire for full-year programs, with the county under-reimbursing both centers and family programs. The study estimates that the county fell short by $2,364 per student for full-year centers and $1,534 per student for full-year family childcare.
Provider Concerns and Solutions
Angie Garcia, executive director of Escuela Viva, a preschool chain, echoed the concerns of many providers. She emphasized the need for lower ratios and the ability to fund additional staff when classrooms have high-need students. Garcia also called for hands-on practical training and consultation tied to the specific needs of the children served.
To address these issues, the study introduces a dynamic cost model that will allow the county to more accurately calculate reimbursement rates. This model considers various factors, including student age, type of center, mandatory employer taxes, licensing requirements, and non-personnel expenses.
Financial Sustainability and Teacher Wages
The study also highlights the challenge of meeting Preschool for All's 2030 goals for hourly wages of teachers, assistants, and early childcare professionals. To achieve these goals, the county would need to significantly increase reimbursement rates, which could further strain the program's finances.
Tax Modifications and Political Implications
The financial strain on Preschool for All has sparked discussions about modifying the tax that funds the program. Business groups have historically supported such efforts, and last summer, Oregon Gov. Tina Kotek expressed concerns that the tax was driving high earners out of the state. However, the county has refuted these claims, stating that there is no evidence to support the governor's assertion.
Conclusion and Future Outlook
The study's findings underscore the complex financial challenges facing Multnomah County's Preschool for All program. As the county grapples with these issues, it must carefully consider the implications for both the program's sustainability and the state's tax base. The dynamic cost model and potential tax modifications will play a crucial role in shaping the future of Preschool for All and its impact on Oregon's communities.
