Private preschools fear cuts, closures under ‘gut punch’ Michigan plans

• Private preschool providers sounding alarms over budget proposals they say will be a ‘gut punch’ to their industry
• That includes a mandatory pay bump under a Senate plan, and cuts to funding under a House-backed budget
• Some, however, including a lawmaker tasked with crafting the Senate’s budget, remain skeptical ramifications could be that serious

LANSING — As Michigan seeks to expand child care access, some preschool providers are warning that Democrats’ proposed changes to the state budget could instead reduce options for families by forcing private facility closures. 

Gov. Gretchen Whitmer and legislative Democrats are pushing to expand eligibility for the Great Start Readiness Program, a free preschool option for  4-year-olds whose family income falls beneath a certain threshold. 

But providers are concerned provisions in the House and Senate budgets would raise costs and cut funding for private facilities, which account for roughly one-third of the state’s roughly 1,350 free preschool sites.

Among them: A House plan to end a requirement that school districts allocate preschool slots to private providers, and a Senate wage mandate that some private providers say they cannot afford. 

Related:

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• What is Michigan’s free pre-K program for 4-year-olds? Q+A with an expert

Those plans don’t “come with funding to sustain private providers that are unable to make ends meet as it is,” said Kate Robinson, executive director of strategic growth for the Grand Rapids-based Everbloom Montessori Cooperative.

Local, intermediate or charter school districts operate about two-thirds of the state’s free preschool sites. But nonprofits and private companies run the rest, and advocates contend the proposals could be detrimental to the state’s workforce, as many communities already face a lack of child care options and child care businesses struggle to hire enough people. 

Perhaps of most concern to providers is a House Democrat budget that nixes a funding requirement for public school districts to dedicate 30% of their total Great Start preschool slots to community-based organizations, which includes programs run out of churches or by organizations like the YMCA.

Those community-based providers would also be barred from accessing $20 million in startup or expansion grant funding otherwise available to schools. 

School districts could still decide to allocate Great Start readiness slots to private providers under the plan but it would no longer be required, said Amber McCann, a spokesperson for state House Speaker Joe Tate, D-Detroit. 

The House budget “does prioritize the school systems as the providers of first choice,” she acknowledged. But that is because Democrats prioritized “lifting up the most quality options” for children, McCann said. 

McCann argued that school-based Great Start programs are typically run by educators with more experience in the field. “Private providers don't necessarily have the same requirements of their staff,” she said.

Great Start lead teachers must have a valid Michigan teaching certificate with a specific endorsement or “a bachelor’s degree in early childhood education or child development with a specialization in preschool teaching,” according to the program implementation manual. There are some exceptions to the rules.

Michigan’s child care landscape

The House, Senate and governor’s office are negotiating final details of the budget, which could be completed as soon as next week. The legislative debate on preschool funding comes amid ongoing access concerns.

Roughly 44% of Michiganders live in a child care “desert,” according to a 2023 report from the First Five Years Fund, a non-partisan group aimed at expanding early learning and child care programs at the federal level. 

Deserts are defined as areas where there is little to no child care available for the number of children in need. Without that access, some families are forced to readjust their schedules to take on care themselves.

A 2023 report from the Michigan Chamber of Commerce found that 14% of Michigan parents had left a job in the prior six months due to issues with child care, which can include preschool or daycare. 

It’s no surprise, then, that policymakers and providers see child care and the economy as inextricably linked.

“Four-year-olds who go to pre-K arrive at kindergarten better prepared to learn,” Whitmer said in her 2024 State of the State address. “They are more likely to graduate, go to college, and earn more. And we know higher education or skills training leads to higher incomes.” 

As part of Whitmer’s push to offer free preschool for all, the state recently created a list of recommendations on how to meet that goal by 2027. 

The report — created with feedback from child care providers, intermediate school district representatives and state policy officials — said the kind of community-based providers who are now worried about sustained funding have helped Michigan achieve a “mixed-delivery approach.”

“This approach has many benefits, like expanded choice for parents, faster scale-up, and stabilization of the 0-3 workforce,” the report states. 

Under current law, Michigan families can qualify for preschool if they earn less than 300 percent of the federal poverty level. This year, for a family of four, that meant $90,000 or less.

Whitmer’s budget proposal removes the family income cap and raises the per student provider payment. The House and Senate also raise the per pupil rate but would not fully remove the financial cap on preschool access. 

The legislative plans instead call for changes to Great Start, including the Senate proposal that would require private preschool teachers to be paid comparably to teachers in the surrounding area.

Senate Democrats contend the changes are necessary to help pay private preschool teachers — who already face low wages — on par with teachers in traditional and intermediate school districts.

Without pay parity, one argued, more preschool teachers frustrated by their wages could leave the industry and contribute to the worker shortage. 

Educators in community-based Great Start preschools earned a median salary of $35,765 in 2021-22, according to a study by Michigan State University researchers.

That was nearly $23,000 less than the median yearly take home pay of K-12 teachers employed full time, according to that same data, and $7,235 less than what educators in school-based Great Start programs earned.

“We know wages for those workers are far too low,” said Sen. Darrin Camilleri, a Brownstown Township Democrat in charge of crafting the Senate’s proposed School Aid budget. 

“They need additional assistance, because they have families at home too.”

Changes in the House

Business leaders and community child care providers prefer Whitmer’s plan, which includes private facilities in her push for free preschool. 

The legislative proposals, however, would be “a gut punch,” said Marcus Keech, director of government affairs with the Grand Rapids Chamber.

“All of us … support innovation and increasing the salaries of those tasked with caring for our children,” Keech said at a recent press conference. “But we cannot do so without regard to where that funding comes from.”

Critics of the House plan say it would ultimately diminish parent choice for preschool, along with access to before- and after-school programs.

“For decades, we have worked in partnership alongside school based providers to expand and grow preschool classrooms,” said Dawne Bell, vice president of youth development for the YMCA of Greater Grand Rapids, “and often we offer extended learning options to meet the needs of families.”

Without that money, Bell believes it will have a significant “potential impact for families and organizations” like hers.

House Democrats think private providers “should be considered as part of the options available depending on where the services are being sought,” said McCann, the spokesperson. 

But a one-size-fits-all approach to free preschool offerings is not appropriate, she argued, explaining the rationale of lifting the requirement for local school districts to allocate slots to private providers.

In Midland County, 73% of eligible children attend preschool programs in community-based organizations, according to Midland County Educational Service Agency Superintendent John Searles. 

“Parents choose to go to those places because they have good reputations, because they might be close to their place of work,” Searles said. 

Limiting these providers’ access to state funds could hurt a program’s bottom line and ultimately lead to closure — making it harder for parents to find child care and possibly forcing parents to leave the workforce to take care of their children, Searles said. 

Parity pay in the Senate

The Senate’s plan, if approved, would require providers be paid comparably to teachers in surrounding intermediate school districts. 

Camilleri, the Brownstown Township Democrat in charge of crafting the Senate School Aid budget, told Bridge Michigan this month that if private providers are using state funds, then the state should get a say in “how those teachers are paid.”

“We know wages for those workers are far too low,” he said, referring to private providers. “They need additional assistance, because they have families at home too.”

Critics say that while the pay parity proposal is admirable, the budget provides no specific public funding to make it happen.

Public schools are able to pay higher wages because they have school bonds to pay for capital costs while private providers do not have that option, said Tim Bartik, senior economist at the W.E. Upjohn Institute for Employment Research, and one of the members on the Michigan Pre-K action team that contributed to the recent state report. 

“If you want to move instead to a structure where you run this exclusively through public schools, there are potentially some huge transition costs associated with that,” Bartik told Bridge, noting public schools can subsidize their preschool programs using other funds as well.

In the state report, leaders outlined different ways to achieve pay parity with K-12 teachers, including increasing the per student amount or switching to a per classroom funding model, instead of having pre-K programs funded per child.

Bartik predicts many community based providers could not fulfill the wage requirement, which could limit child care and preschool availability. Some districts don’t have the classroom space readily to expand either. 

“It’s difficult to actually pay preschool teachers at public school teacher wages at the funding level proposed,” Bartik said.

Camilleri couldn’t offer a timeline for when budget negotiations would ramp up, other than to say Democrats were “still in negotiations.” The state has traditionally signed off on the budget in early July, with the new fiscal year beginning Oct. 1.

That leaves people like Robinson, with the Grand Rapids-based Everbloom Montessori Cooperative, anxiously awaiting whatever the Legislature decides.

“There are a number of reasons that could push us,” to closure, Robinson told Bridge. “This would be one sliver of that.”