Smart Start Overhead Takes From Kids

This story is part of an ongoing series evaluating  Smart Start and related early childcare programs in an attempt to improve their efficiency and priorities. Related articles and presentations can be found here and here.

Smart Start and the Division of Child Development (DCD) both administer state childcare subsidy funds to needy children, yet DCD spends considerably less to administer the same sorts of subsidies than Smart Start does. Childcare subsidies provide affordable childcare to eligible families in severe financial circumstances. In fiscal year 2008-09, before the budget crunch brought on by the recession, there was an extremely large disparity in administrative costs between Smart Start and DCD. While DCD spent 4.56 percent of its budget on administration, Smart Start spent a hefty 10.07 percent. Comparing these administrative rates, simple math shows that if Smart Start lowered its administrative expenses to be on par with DCD, $4.3 million could have been freed up to assist more needy children. According to a DCD report of the average subsidy amount per child, this funding could have extended subsidy services to an additional 935 children.

The recession has caused these numbers to even out somewhat, but a large disparity still exists that reduces the amount of subsidies able to reach children. Today, Smart Start administers subsidies at a rate of 8.33 percent of their budget, in contrast to DCD’s more modest 5.37 percent. If these subsidies were administered at the DCD rate, the state would save an immediate $2.3 million, which could provide almost 500 extra subsidies to needy children.

Especially in the course of a recession, North Carolina needs to ensure that more of its funding goes to children and families struggling to make ends meet. Large administrative expenditures do nothing to improve the lives of children, but rather siphons off critical tax dollars from the most needy and vulnerable in our society. Administrative costs should be universally lowered, prioritizing direct services to children and daycare providers. It is imperative that the state looks inward during this economic downturn to iron out inefficiencies and duplicative programs, saving the state money and providing more services to those who need them.


This article was posted in Education by Andrew Henson on March 1, 2011 at 3:31 PM.

© 2011 The Civitas Institute. Visit us on the web at www.nccivitas.org.
This article can be found at http://www.nccivitas.org/2011/smart-start-overhead-takes-from-kids/

Comments on this article

  • 1

    Joy Sotolongo
    Joy Sotolongo Mar 04, 2011 at 12:37

    In all your posts about child care subsidy, I don’t believe I have seen you mention the word “quality.” While efficiencies and serving a greater number of children and families are absolutely important, you are remiss in discussing issues that impact “the most needy and vulnerable children” without also discussing the quality of early care and education. Study after study shows that only high quality care and education provides lasting benefit. As you continue to dig deeper into early education, please broaden your perspective beyond cost.

  • 2

    Dr. George N. Gates
    Dr. George N. Gates Mar 11, 2011 at 19:21

    As a former board chair of the New Hanover County Smart Start, I had six years to understand the scope of Smart Start services. Your focus and hyperbole concerning “serving the most needy and vulnerable children” neglects to grasp the issue of quality care. It’s more than throwing money at a situation. Smart Start is held to the highest level of accountability. Over the period of time that I was on the board, we consistently received audit scores with no findings. We take it seriously and don’t appreciate casual disparagement of the issues. Smart Start is needed and leads in the country in setting standards for early child development.
    Please don’t mislead the public.

    Dr. George N. Gates

  • 3

    Perry Carroll
    Perry Carroll Mar 23, 2011 at 7:33

    Mr. Henson, Would you mind sharing with us the salaries of your Civitas employees? Since you are funded by citizen donations, I think that would be in order.

  • 4

    Andrew Henson
    Andrew Henson Mar 23, 2011 at 9:54

    I promise you, Perry, you wouldn’t be impressed.

  • 5

    jean m
    jean m Mar 26, 2011 at 13:07

    Seriously Perry Carroll? From what I understand, Smart Start is funded by our State Government $ (at least 90%), that’s my money (and yours as a matter of fact – if you pay taxes here). We are forced to pay these peoples’ salaries through our taxes, so the way I look at it is I have a right to know how much they make, and how they spend my money – especially compared to other agencies or organizations that provide the same type of services. And, you will never convince me that Smart Start administrators are better educated, more intelligent or provide better (quality) care than other people that do the same type of work in other agencies – although I must say they appear to be better connected.

    Please correct me if I am wrong, but Civitas is funded by money given voluntarily – not through tax dollars. It is up to their contributors to evaluate what they do and based on that they may contribute or not.

  • 6

    Clarification on Salaries
    Clarification on Salaries Mar 31, 2011 at 0:40

    What *might* have been relevant about Smart Start salaries would have been the amount of salaries PAID WITH State (taxpayer) dollars. Civitas is a smart group with a clear anti-Smart Start agenda that they have demonstrated over and over again. They strategically chose NOT to indicate that a number of those Smart Start employees’ salaries included significant portions paid by other (non-taxpayer) funding sources. After all, that would have required sharing facts and details that would cloud the misleading implication that all those people are paid entirely with State funds.

    Have you ever heard of a lie of omission?

  • 7

    Kevin
    Kevin Apr 19, 2011 at 10:38

    Civitas has made big deals out of a few instances it has taken issue with at Smart Start. Every organization has areas that could be improved and Smart Start is no different. What I don’t understand is the obvious desire to kill Smart Start instead of improve it. What is the point of destroying 17 years of excellent work because of a very few, sensationalized situations that are not representative of the entire organization or its history?

    Civitas paints with such a broad brush across all of Smart Start, more than implying that the entire organization suffers from wasteful over-spending and gross mis-management. That simply isn’t the truth. But, I am coming to understand that, in politics, truth is not important if it gets in the way of an agenda.

    So, perhaps we should be asking, “What is your real agenda, Civitas?” Reform? I don’t think so. Devastation, is more like it.

    However, even more important than wasting time on Civitas, is spending time asking each of our legislators why they never delved into the facts of these stories? How did they let such an organization as Civitas present its one-sided attacks on one of the most accomplished state organizations without allowing rebuttals or even unbiased opinions to be presented as a balanced set of legitimate concerns? They have taken the Civitas bait, hook, line and sinker, as they say. I think we need to remember this come next voting season.

    Whether you agree or not with the accusations levied against Smart Start, we must all stand up against politicians who let others do their thinking for them. Civitas cannot be the only voice in the ear of those we elect. If it is, then perhaps we should let them know we would rather someone capable of listening to concerns, hearing proposals to improve and making their own minds regarding change.

    Slash and burn is not change, it’s anarchy. Is that what we elected them to do? Really?

  • 8

    Andrew Henson
    Andrew Henson Apr 19, 2011 at 11:26

    @Clarification on salaries: You call this a lie of omission? I don’t think it helps the Smart Start case when they praise their ability to “leverage money into the community” that they’re leveraging a lot of that money into their administrator’s pockets.

    @Kevin: millions of dollars could be realized by consolidating a lot of the functions of Smart Start within existing bureaucracies. That seems like quite an improvement to me. We’re not advocating destroying a service, but rather giving preference to a more efficient means of delivering those services.

    Kevin, you make a very ignorant assumption that devastation is the goal of Civitas. How would Civitas possibly benefit from or desire devastation? Please think that one through a little bit more.

    In addition, you speak of “one-sided attacks”. This is very surprising because the Smart Start’s lobbying presence at the capitol has been relentless. Legislators have been pestered over an over by Smart Start folks… Believe me, they’ve heard your spiel. Your side is well represented. You have Gov. Hunt lobbying there frequently to preserve his legacy. There is nothing one-sided about it.

    Your argument is completely baseless — your premises false, your conclusion nonsensical. Thank you for your feedback, but please make your commentary a bit more constructive and logical.

Leave a Reply

Sorry, due to spammers you must have Javascript enabled to make comments.