Multnomah County's Preschool for All program is facing a financial conundrum that could have significant implications for its sustainability and the quality of early childhood education in the region. The recent study commissioned by the Multnomah County Board of Commissioners reveals a stark reality: the county's reimbursement rates for Preschool for All providers are insufficient to cover the true cost of care.
The study, conducted by Prenatal to Five Fiscal Strategies (P5FS), highlights a substantial gap between the expenses incurred by childcare providers and the reimbursement rates set by the county. In the 2025-2026 fiscal year, the reimbursement rates were $17,532 per seat for a six-hour day and $25,008 for a 10-hour seat. However, the true cost of care per child varies depending on the type of childcare center and the length of the program.
For childcare centers offering six-hour days during the school year, the study estimates the true cost to be $20,253 per student, resulting in an under-reimbursement of $2,721 per student. Family childcare programs, on the other hand, were over-reimbursed by $748 per student. The situation is even more critical for full-year, 10-hour seat programs, where both centers and family programs were under-reimbursed by $2,364 and $1,534 per student, respectively.
This financial disparity is not a new concern. Providers have consistently expressed their struggles to cover the costs of running their preschool programs, especially regarding inclusion supports for students with disabilities or developmental delays. Angie Garcia, the executive director of Escuela Viva, emphasized the need for lower ratios and the ability to fund additional staff when dealing with high-need students. The study's dynamic cost model, which considers various factors like student age, center type, and mandatory taxes, aims to address this issue by providing a more accurate reimbursement calculation.
The implications of this financial shortfall extend beyond the providers. Business groups have historically supported efforts to modify the tax that funds Preschool for All, which currently relies on marginal income taxes. The concern is that the current tax structure may be driving high earners out of the county, as suggested by Oregon Gov. Tina Kotek. However, the county has refuted these claims, stating that there is no evidence to support the governor's assertion.
The study's findings will undoubtedly influence the discussions surrounding Preschool for All's revenue this summer. As the county seeks to develop a more dynamic reimbursement model, it must carefully consider the financial needs of providers and the long-term sustainability of the program. The challenge lies in finding a balance between ensuring adequate funding for early childhood education and maintaining a sustainable tax structure that supports the county's broader goals.
