In Sprawling Pre-K Network, NYC Rates Leave Some Centers Falling Short

As New York City officials signed up private preschool providers for this fall’s pre-kindergarten expansion, they negotiated reimbursement rates with each program individually. They were tough negotiators who left many private pre-k providers operating beyond their means, without a plan for how to make ends meet.

Programs in vastly different circumstances and neighborhoods are mostly getting a similar rate—around $10,000 per child. School directors told WNYC this rate translates into very different capacity, as some have plenty to spend on extra perks and others are barely scraping by.

Deputy Mayor Richard Buery, who's in charge of the pre-k expansion, said his staff is monitoring all of the programs to ensure quality.

“We’re in constant discussion with providers,” said Buery, “and we talk to them, we figure out what their challenges are, and we work to come to a conclusion within financial constraints—which are obviously real—because no one has an unlimited budget.”

Take Sunnyside Community Services, which runs a pre-k center in a Queens neighborhood where rents are rising. Directors initially requested $10,800 per child—the actual cost of operating their pre-k program. Officials awarded them $9,800, creating a budget shortfall. 

“There’s a gap,” said Jonah Gensler, one of the directors. “It may not be a huge gap. But you feel it when you think, ‘How do you pay your staff, and how do you keep the lights on?’”

The directors have moved funds from other parts of the organization to make it work this year, but next year doesn't look promising: they have to renegotiate their lease and they expect the rent to rise.

In contrast, Gensler said he used to work in Newark, New Jersey, in one of the so-called Abbott districts, where a court required the state provide high-quality pre-k in poor communities. Private programs there now receive about $14,000 per child per year.

“They had an outdoor playground, and they had musical instruments and all the things you want an ideal preschool to give students a head start to have,” Gensler said. “With $9,800, we can’t do that.”

Ellen Frede used to work at New Jersey's Education Department, where she oversaw the Abbott districts in the early years and helped develop pre-k budgets so the state could provide adequate funding. She said the budgets included fair-market rent, and a rainy-day fund to cover costs of a broken boiler or a stolen air conditioner. Early on, she said, it became clear that many pre-k directors didn’t know how to write effective budgets—so officials provided budgetary coaching and mentoring.

In addition, officials covered the costs for teachers to study for certification, and also for substitute teachers to take over when teachers left early to attend class and upgrade their skills, she said. There were also funds for substitutes and floaters to make sure teachers got prep time and sick days. All these factors helped boost the quality of pre-k teaching in New Jersey, she said.

As in New York, New Jersey officials operate some of the pre-k centers in public schools, but also work through private providers. Eventually New Jersey audited its programs, and after years, created a tiered formula. Now the state reimburses public schools, private centers, and Head Start programs separate standard rates based on the real operation costs examined over time. Private programs in New Jersey, where rent is generally cheaper than in New York City, get $14,375 per child, according to a current New Jersey Department of Education official.

Frede said that as New York City’s expansion progresses, it will be critical for administrators to assess the actual costs of providing pre-k in diverse neighorhoods and adjust their range of funding accordingly.

“I think it’s very important they conduct an analysis of what the actual costs of the program are in different locations and different conditions,” she said.