There isn’t much room on the state’s dole this year for government administrators earning more than the Governor herself. So it is without much surprise when the Senate targets the North Carolina Partnership for Children (NCPC), a middle-man administrator of Smart Start, in order to help reconcile a $2.4 billion shortfall. Streamlining Smart Start comes as one piece of a comprehensive pie to make early childcare programs run more efficiently – creating a (more) cohesive and unified delivery system for these vital programs that will in the future provide children and childcare providers with a greater share of state funding.
The Senate Budget invokes the age-old business practice of ‘cutting out the middleman’ by eliminating funding to NCPC, one of several entities comprising the long bureaucratic chain that ferries state funding along to children and childcare providers as part of North Carolina’s Smart Start program. If the Senate’s budget provision holds, local Smart Start partnerships will contract directly with the state Department of Health and Human Service’s Division of Child Development (DCD) for functions previously performed by NCPC. These functions consisted primarily of compliance and financial reimbursement of the local partnerships. This reduction will take one link out of the chain, saving the state around five million dollars while preserving the integrity of Smart Start’s concept and mission of local flexibility and community partnership.
Present funding streams for Smart Start have long been criticized for choking the funding potential for childcare programs, being in part referred to as “cumbersome, inefficient, and very bureaucratic in nature.” Under the current system, state funding for Smart Start passes through one government department and at least two non-profits before finally reaching children and childcare providers.
Another likely contributor to NCPC’s possible demise could include using taxpayer money for excessive compensation for employees. Legislators found compensation levels to be so high for NCPC and local partnerships that both House and Senate budgets include salary caps for Smart Start employees to ensure fairer pay grades. The average salary for NCPC employees exceeds $60,000, with the average top five employee salaries exceeding $110,000. NCPC President Stephanie Fanjul recently earned a total compensation package of $173,000.
Reaction to streamlining Smart Start has been mixed. Not surprisingly, NCPC Board Chair Dr. Olson Huff defended his organization. “The Senate’s proposal to rob the state of this vital program is poor education policy and poor economic policy,” Huff stated in a recent publication. “This is hardly a growth strategy for our state. The state’s youngest children are taking the hardest hit.” It is unclear what Huff intended by intimating that administrative changes would have any impact on funded childcare programs. NCPC did not answer requests for comment at the time of this posting.
Similar language emanated from the NC Childcare Coalition, a project of the North Carolina Early Childhood Association (NCECA), a group with strong ties to Smart Start. Internal publications by the Childcare Coalition, using inflammatory and hyperbolic language that has come to characterize Childcare Coalition communications throughout this year’s budgetary proceedings, accused the Senate of tearing apart the North Carolina early childhood system—going further to state that “the Senate leadership did not have the guts to eliminate programs in an honest way.”
Many Smart Start board members, however, have broken ranks and turned on NCPC, describing it as a duplicative bureaucracy mired with personal politics. Several Smart Start board members, who requested to remain anonymous due to fear of political or financial retribution, discussed their agreement with the Senate’s budget with Civitas staff.
According to one such board member: “The dismantling of NCPC will hopefully eliminate the unnecessary local agency politics that has crippled Smart Start’s intended goal. While advocates of Smart Start describe the more streamlined approach of operating from one central agency such as DCD as devastation to the early childcare system, it just further illuminates how they discount the real workers that are making the difference on the front lines working with families and young children: childcare providers.”
Additional voices of support have emerged from across the state. William Walton, a childcare provider and Smart Start board member in Pitt County, greeted the change as a positive step towards reforming bureaucracy in the childcare system. “Any restructuring of agencies or programs that work to reduce bureaucracy and administrative costs thereby preserving as many services to children and working families has my support,” Walton said. He voiced similar support for other findings in the Senate budget. “As far as Smart Start goes, I’m delighted to see the Local Partnerships with most of their program funding preserved in the Senate budget proposal.”
Additional adjustments to Smart Start include lowering administrative costs for local partnerships from 8 to 4 percent, instating a salary cap for local partnership staff, and increasing a mandatory minimum requirement for childcare subsidy expenditures. The subsidy expenditure provision will increase the mandatory requirements for childcare subsidies from $52 million to $72 million, with the caveat that extra subsidy funding be spent on reducing the childcare subsidy waitlist which currently hovers at around 47,000. Locking in subsidy expenditures will be critical to working families who struggle to find access to affordable childcare.
As budget negotiations progress, Smart Start will be a clear point of contention between the Governor and the legislature. Pressure on Governor Perdue from Smart Start founder and former Democratic Governor Jim Hunt may push Perdue to fight to keep the vestige of Hunt’s legacy alive. It remains to be seen whether childcare providers and supporters of a streamlined childcare system can muster the support to preserve this provision through conference committee and into the final budget.
 Recommendations On Supporting Work and Self Sufficiency By Increasing Access to Child Care for North Carolina’s Low Income Families (2010) (testimony of The North Carolina Association of County Directors of Social Services). Print.