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Kids before tax breaks 

It turns out that doubletalk is only the province of Chairman Alan Greenspan and that the Federal Reserve banking system is capable of clear and unambiguous wisdom. The evidence is a now widely circulated paper by a couple of economic analysts for the Federal Reserve Bank of Minnesota, senior vice president Art Rolnick and regional analyst Rob Grunewald. Their take, backed by extensive research, is that states like Arkansas that want to spur their economies should get rid of all the tax breaks and subsidies they shell out to attract industries and instead invest in developing the minds of 3- and 4-year-olds. Corporate tax benefits at best merely move jobs from one place to another but sending fertile brains to kindergarten and the primary grades ready to learn pays dividends for a lifetime for everyone, not just the kids. None of this is new. Research, starting with the famous High/Scope Perry Preschool Project at Ypsilanti, Mich., far back into the last century, proved that disadvantaged 3- and 4-year-olds who were exposed to stimulating preschool programs did far better in school and in life than those who didn’t have the exposure and that taxpayers’ investment in these programs paid huge economic returns. Eighty-five percent of the brain’s architecture is in place before the age of 5 and neglect in that period can never be made up. Nobel Prize economist James Heckman recently concluded that investing in developing the minds of poor 3- and 4-year-olds was going to be vital to maintaining future productivity in a U.S. work force that is in decline. Rolnick and Grunewald advanced the next logical step. If states need to invest in preschool education how can they do it if they are giving away public resources in a vain attempt to lure industry from a struggling sister state? The Little Rock Branch of the Federal Reserve Bank of St. Louis deserves our thanks for bringing Grunewald to town to explain his bold thesis in its “Breakfasts with the Fed” series. Not that it will make much difference, but the timing could not be better. Monday, the legislature was busy, like most of its predecessors, trading away the treasury in tax breaks to maximize the profits for businesses that say they need them to meet competition from other states and countries, making it less and less likely that the state can fund its fledgling preschool program. The House on Monday voted to eliminate sales taxes on electricity and natural gas consumed by the timber industry, and the Senate voted to excuse a chlorine company that will soon build at El Dorado from sales taxes on electricity that it consumes. At least a dozen other business tax sacrifices are in the legislative pipeline. To keep the Arkansas Supreme Court at bay, the legislature last year sort of committed to spending $100 million a year to provide preschool education for children of poor families. Circuit Judge Collins Kilgore had mandated the state to do that, saying that an equal and quality education was not possible without it, but the Supreme Court softened that order to a gentle suggestion. The legislature put up $40 million last year but even that may be more than the budget will bear the next two years although the legislature’s Democratic caucus made preschool its priority. Only a few lawmakers, like Rep. Leroy Dangeau of Wynne, really seem to see the light. Fewer than 9,000 Arkansas children are in full-day Head Start or Early Head Start programs. Tens of thousands of children in blighted East and South Arkansas will enter kindergarten or primary school with no preschool training and, frequently, no stimulation at home. You can see the results in every statewide summary of standardized test scores. Forty percent of Arkansas fourth-graders score below basic reading level. For 175 years, efforts to get uniform early childhood education floundered because of the old notion that stimulation harmed tender minds. Now, owing partly to change in the family structure, in particular the single-parent household, it is imperative. Sixty-two percent of Arkansas women who have children under 6 are now in the labor force, often leaving the kids with fewer opportunities for stimulation in the period when their linguistic, conceptual and social attitudes are developing. Our humanitarian impulses ought to make us do it, but those seem to be growing weaker. So Rolnick and Grunewald pitch the question to our economic self-interest. Stimulating the minds of these poor black and Hispanic children means fewer will be criminals and deadbeats, fewer will have teen-age pregnancies and more will be productive men and women and create wealth for all of us. It made sense to Oklahomans, who now fund early childhood programs for all. Even zany Zell Miller, the wingnut who turned on Democrats last year, saw the light when he was governor of Georgia and came close to making state-funded preschool available for all 4-year-olds. We can do it too if they don’t give away the store.
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