Skip to main content
A study commissioned by the Multnomah County Board of Commissioners earlier this year found that the county’s reimbursement rate for Preschool for All is, on average, not enough for providers to cover the true cost of care for running their preschools.
The findings of the study, conducted by nonprofit consulting firm Prenatal to Five Fiscal Strategies, will be presented at a Tuesday board briefing. The results of that work, which cost about $200,000, come as commissioners prepare for a second summer to examine Preschool for All’s financial outlook and weigh changes to the tax that funds it. (The study came at the request of two advisory groups the county convened to advise commissioners on Preschool for All’s financial sustainability and what it will require. Commissioners Julia Brim-Edwards and Meghan Moyer co-sponsored a resolution to commission the study in February.)
The study finds that in a default scenario developed by P5FS, a significant gap exists between many child care providers’ expenses and what the county reimburses them per student. In the most recent year, reimbursement rates were $17,532 per seat for a six-hour day during the school year, and $25,008 for a 10-hour seat for the calendar year.
It finds that the true cost of care per child varies based on type of child care center and length of year.
It calculated true costs for the six-hour day during the school year program to be $20,253 per student in child care centers, and $16,784 per year in family child care. In the latest school year, P5FS estimates the county underreimbursed child care centers offering these services $2,721 per student, but that it overreimbursed family child care programs by $748.
In full-year, 10-hour programs, the county underreimbursed both centers and family programs. The P5FS study estimates those seats cost centers $27,372 per student and family programs $26,542 per student.
That means that in the previous fiscal year, the county underreimbursed full-year child care centers by $2,364 per student, and underreimbursed full-year family child care centers by $1,534 per student.
The findings are in line with what several providers have shared with county commissioners. In February, a few expressed concerns that the county’s current rates for the past fiscal year weren’t covering the costs they incurred running their preschool programs. Those concerns were especially pronounced around inclusion supports, or funding for young preschoolers with disabilities or developmental delays.
“Providers need lower ratios and the ability to fund additional staff when classrooms have additional high-need students, [and] hands-on practical training and consultation tied to the children they are actually serving,” Angie Garcia, executive director of preschool chain Escuela Viva, said then.
Because each preschool will have different needs based on the students they serve and individual circumstances, accompanying the study is a dynamic cost model that will allow the county to calculate more accurately how much to reimburse preschools.
The county plans to use the tool to develop a more dynamic reimbursement model. It currently develops rates based on provider feedback and market rates.
In conducting its study, P5FS engaged with 65 preschool providers and with quantitative data from the county. Its ultimate model considers a number of factors: student age, type of center, mandatory employer taxes and liability coverage, licensing requirements, nonpersonnel expenses like materials and transportation, and Preschool for All’s salary step requirements.
It also found that, in order for Preschool for All to meet 2030 goals around hourly wages for teachers, assistants and other early child care professionals, it would need to reimburse providers much more. The county closes the gap a bit in the upcoming fiscal year, when rates will increase to $18,233 a seat for a six-hour day during the school year, and $26,009 for a 10-hour seat during the calendar year. (WW calculated fiscal year 2027 reimbursement numbers with figures from the study; the county could not immediately confirm them.)
The news that Preschool for All costs more than it’s currently reimbursing will likely throw an additional curveball into conversations about the program’s revenue this summer.
Business groups have in past years thrown their weight behind efforts to modify the tax, currently 1.5% on income over $125,000 for single filers or $200,000 for joint filers, and an additional 1.5% on income over $250,000 for single filers or $400,000 for joint filers. Last summer, Oregon Gov. Tina Kotek worried that it was driving high earners out of the county, and subsequently out of the state. The county has told reporters that it does not have evidence that would back up the governor’s claim.
Neither Brim-Edwards nor Moyer immediately responded to a request for comment from WW.
