Mayor Carter is right, St. Paul has no money for childcare
A battle is brewing up in the St. Paul City Council over a free to low-cost childcare proposal. After failing to garner enough verified signatures in 2022, St. Paul’s universal Pre-K proposal has evolved into a plan for childcare subsidies for all children, and it’s on the ballot this year. To the dismay of other city council members, Mayor Melvin Carter has announced that city staff will not implement the program if voters approve it.
As reported by WCCO,
In a letter to the City Council late last week, Carter highlighted his concerns and argued the ballot measure’s language is misleading because it suggests all low-income children will benefit when only a fraction will.
He also said the city has neither the staff nor the infrastructure to take on such a program and that the city council cannot compel the administration to implement it—or administer it themselves.
“My administration must respectfully decline to propose, plan, staff, and/or implement programming pursuant to the outcome of this referendum,” he wrote.
In an interview with WCCO, he again reiterated that he does not believe the city can act on the plan.
“It’s just not possible,” Carter said of the proposal in an interview with WCCO. “So it’s not a promise that we can—with any integrity—look our voters in the eye and tell them is possible to keep.”
Whether Mayor Carter can legally bypass a ballot measure approved by voters is a question economics can’t answer. However, looking at the city budget as well as research on universal childcare programs, Mayor Carter is right.
St. Paul has neither the money nor the infrastructure for a good universal childcare program. Going forward with such a proposal will likely only create problems for the city budget as well as low-income children.
The city budget is already flashing red
According to the US Census Bureau, 5,175 kids under 5 lived in poverty in St. Paul in 2023. Before accounting for administrative costs, the city would need $15.5 million (at $3,000 per child) to $41 million (at $8,000 per kid) to cover just the children below poverty. Between 100 and 185 percent of poverty, St. Paul has another 5,000 more kids. So, the total cost of the program would double. Even then, the program wouldn’t pay for the total cost of childcare, which for infants can be as high as $22,000 per year.
To their credit, city council members pushing for the program realize that St. Paul cannot fund every child. Moreover, some children in St. Paul are also covered by other state and federal programs, such as Head Start. But even if the city were to create a modest program covering a fraction of eligible children, it would likely need tens of millions of dollars given the high cost of childcare.
Mayor Carter’s 2025 budget proposal has called for a 7.9 percent increase in St. Paul’s property tax levy — a $132 tax hike for the median house. That tax hike could reach double digits if the childcare program passes. And if commercial properties keep declining in St. Paul, taxes will have to be raised even further. All these tax hikes, however, are coming on the heels of a 1 percent sales tax, which was needed to pay for roads, and a double-digit property tax hike enacted in 2023.
Creating a multi-million dollar 10-year spending obligation given all these budget issues would be extremely unwise.
It could be bad for children
Generally, it is difficult to control for quality when it comes to Universal childcare programs given their size. Moreover, these programs tend to push more parents into the labor force subjecting some children to low-quality care arrangements. For that reason, they have been associated with negative outcomes among kids in some areas where they have been tried.
For instance,
When Quebec offered cheap childcare to all parents, it encouraged more mothers to enter the workforce. However, according to later research, the program also worsened behavioral and health outcomes in children and led to “more hostile, less consistent parenting, worse parental health, and lower-quality parental relationships.”Moreover, these effects persisted to school ages and beyond. One study found that “cohorts with increased childcare access had worse health, lower life satisfaction, and higher crime rates later in life.”
In Tennessee, children enrolled in the state Pre-K program “had lower state achievement test scores in third through sixth grades than control children, with the strongest negative effects in sixth grade.”…. the children were also more likely to misbehave and face disciplinary action, and more likely to need special education.
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Other programs like Head Start are not immune to this. In 2010, for example, an Impact Study from the U.S. Department of Health and Human Services found that cognitive gains among children enrolled in Pre-K faded by the time they enrolled in first grade. However, some kids experienced negative cognitive, social-emotional, and health outcomes.
For St. Paul, quality issues associated with publicly run programs could be mitigated if most of the funding is dedicated to high-quality private childcare providers. That, however, is unlikely to happen considering the following.
The annual cost of childcare at licensed daycare centers ranges from $17,000 for Preschoolers to over $22,000 for infants in the Twin Cities Metro. At $3,000 to $8,000 allocated per child, St. Paul would pay for only a fraction of the total cost of care. To recoup their expenses, daycares would have to enroll in multiple assistance programs. Publicly funded programs, however, often drown providers in paperwork and are notorious for making late payments. It is doubtful that private providers will be eager to sign up for the program or even create new slots, like the ballot language promises.
Table 1: The weekly Cost of Childcare in the Twin Cities Metro
| Licensed Day Care Centers | Family ChildCare | |
| Infants | $440.87 | $223.28 |
| Toddlers | $386.16 | $212.76 |
| Pre-School | $332.92 | $201.33 |
| School Age | $296.08 | $176.83 |
Most disadvantaged families — which are the ones in dire need of help—, would also have trouble navigating the numerous overlapping local and state programs. Family childcare providers, while more affordable than centers, also cost significantly more than the subsidy would cover, leading to the same issues. Realistically speaking, this leaves public schools as the most viable option.
The Teachers Union in St. Paul has urged voters to say no to the ballot measure, arguing that public funds should be going to public programs, not private companies. If the ballot measure goes through, there is likely going to be a major push from the Union to allocate all funding to public schools — an arrangement that would ultimately subject low-income children to subpar learning environments associated with other publicly run programs.
St. Paul has no money or infrastructure for the right kind of childcare program
To accomplish the kind of results that residents want — closing the achievement gap — St. Paul would need a specifically designed and carefully implemented program.
For example, one of the most successful and highly cited Pre-K programs — the Perry School project, which ran from 1962 to 1967 in Michigan — only targeted African American children at risk of failing school and only enrolled 58 kids. The program cost $21,800 per child and provided other after-school programs, such as home visits.
Other cities, of course, have also had some positive impacts with bigger programs. But again, these programs have been carefully controlled for quality and cost a lot. Boston, for example, spent $13,000 (in 2020 $) per year for a full day of Pre-K at the inception of its program in 1995.
As it is currently proposed, St. Paul’s program would only provide a fraction of the money that is needed to implement a high-quality early childhood program. The city, moreover, has no prior experience or expertise in administering early childhood programs. Public schools (assuming they are left in charge of the program) would have to develop the infrastructure needed for much younger kids from scratch.
Mayor Carter is right. St. Paul has neither the money nor the infrastructure for the kind of childcare program that research agrees pays dividends for disadvantaged children. Going forward with the proposed initiative will only impose a heavy burden on taxpayers and expose low-income children to low-quality care environments that could be bad for them.