Children’s Experts: Investing in our State’s Future Starts with Children Not Corporations

Editor’s note: This perspective was originally posted by NC Policy Watch.

To build a thriving North Carolina, we need a multiracial democracy, an inclusive economy, and a commitment to ensuring people across the state have access to the health care, education, and social support they need. To realize this vision, our state needs equitable public investments, including funding for early childhood education that supports our youngest residents and their families. As our state lawmakers continue negotiations in an attempt to come up with a budget that the House, Senate, and Governor can agree on, they have a responsibility to create a budget that prioritizes North Carolina’s children over out-of-state corporations.

But the proposals that have come out of the NC Senate and House so far don’t meet this standard — the Senate’s budget proposal would eliminate corporate income taxes, and while the House’s doesn’t go quite as far, it includes multiple tax changes that will ultimately prohibit North Carolina from realizing its potential. Both proposals also include changes to income taxes that would primarily benefit the wealthiest families: under the House proposal, 56 percent of the value of these changes would go to households with annual incomes over $110,000 dollars. These changes would cost our state about $2 billion in annual revenue, limiting our ability to make the public investments our communities need.

As experts in childhood development and child care, we know we know that early childhood education presents one of the strongest cases there is for public investment. Nobel Laureate economist James Heckman conducted groundbreaking research showing that investments in high-quality early childhood education yield a robust return on investment of 13 percent per child per year. These benefits come from improved outcomes that children see throughout their lives, including in educational attainment, health, and employment. Public investments in early childhood education even impact future generations and reduce intergenerational poverty.

It doesn’t work to provide child care only through the private sector. Licensed child care providers operate on the thinnest of margins because families cannot afford the true cost of high-quality care. Even so, parents are left shouldering annual fees significantly higher than public university tuition. We have tried other models for years, and it hasn’t worked. Early childhood education is a public good that needs public funding — like parks, libraries, and K-12 education.

Investments in early childhood education are also an investment in racial and gender equity in North Carolina. The vast majority of early childhood educators are women, and over half are Black women and other women of color. These educators are paid an average of just $11 per hour to nurture our youngest children. North Carolina has some programs that boost wages for educators, but legislators have cut funding for these and so only a limited number of people can access them. The recent budget proposals ask these educators to subsidize corporate tax cuts with their persistently low wages.

North Carolina’s motto is “To be rather than to seem.” If we want to live up to that motto to truly be a state that cares about our children’s future, here are three key actions to take:

First, increase corporate taxes instead of slashing them so that our state has an equitable source of funds to make the investments we need. North Carolina’s corporate tax rate of 2.5% is among the lowest in the country right now and the budget proposals from the House and Senate would set us back even farther. And high-quality early care and education are crucial for the businesses that lawmakers claim to want to entice to North Carolina: their employees are hamstrung without access to care for their children, and early education lays the groundwork for a well-prepared workforce into the future.

Second, pay the child care workforce a living wage for their vital work building our state’s future leaders and thinkers. Recurring state funding for programs to raise childcare workers’ pay must be a part of the state budget. Key programs and policies include increasing the value of child care subsidies and creating incentives for programs to use these funds for compensation; allocating state funding for providers to expand employee benefits like health insurance, retirement benefits, and paid leave; and adopting and expanding publicly funded teacher bonus payments. To advance equity, North Carolina should prioritize getting these supports to bilingual providers, providers of color, and providers serving historically marginalized communities.

Third, expand the scope of policy to support child care arrangements that meet the needs and desires of Black families and other families of color. These families often have jobs with non-standard hours and without paid sick leave, while racial inequities in wealth mean families of color may not have savings for family emergencies. Many children of color, especially infants and toddlers, receive care from a friend, family member, or neighbor. These caregivers, who are also mostly women, contribute to a tapestry of support that families rely on when their schedules change or when licensed child care programs are unavailable or unaffordable. These arrangements can be the most culturally responsive and comfortable for many families outside of the formal early childhood education system. North Carolina must recognize their legitimacy and develop innovative policies that support these alternatives to licensed child care.

North Carolina doesn’t need another tax cut. It needs the General Assembly to develop a budget that invests in children – all children.

Dr. Devonya Govan-Hunt is the President of the Black Child Development Institute in Charlotte. Muffy Grant is the Executive Director of the  North Carolina Early Childhood Foundation. Dr. Iheoma Iruka is a Research Professor at the Dept. of Public Policy and Founding Director of the Equity Research Action Coalition at Frank Porter Graham Child Development Institute.