Editorial: Pay for Success plan could give young students a leg up (Sentinel Source)

In a state notoriously stingy with public funding for education, we might expect a plan that could get many students off to a better start, thereby lessening the cost of educating them, would be hailed in Concord. Better still would be such a plan paid for by private donations, with taxpayers being tapped only if the students showed progress at set guideposts.

Senate Bill 503, put forth by Sen. David Watters of Dover and cosponsored by Sen. Molly Kelly of Harrisville, among others, would use a relatively new, and creative, method of funding preschool programs in New Hampshire, called Pay for Success.

SB 503 would set up a commission and allow the state to authorize Pay for Success contracts to fund preschool programs. Investors would recoup their money from taxpayers, with interest, only if, by 3rd grade, the students involved met specific standards for reading or had reduced need for special education remediation.

Each contract would have to pass muster from the governor and Executive Council. If the project didn’t succeed, the state would bear no cost and educators would have more information about the effects of preschool. If it did succeed, the students and the school district would gain, the investor would make money and be more inclined to reinvest, and the Department of Education would have learned what works to produce better outcomes for our children.

It passed in the Senate, but was likely consigned this week to the dustbin of history, at least for a year, by the House Education Committee, which deemed it inexpedient to legislate.

Watters says that although the full House will still take up the issue, he’s expecting it may take another year or so for the idea to catch on.

“It may just be a little early,” he said, noting such new ideas often require several legislative sessions to take hold.

Despite the state’s high relative ranking in educational success, preschool in New Hampshire largely doesn’t exist on a public level. There are private programs, including several fine options in this region, but they are populated mainly with children whose parents have the means to pay for them. Programs such as Head Start aim to give a boost to children in low-income households, and the state does offer help to special-needs children — at least, those whose parents recognize their needs and seek it. But this all leaves a lot of cracks through which kids, including those with learning difficulties, can fall.

Although studies show children who attend preschool programs are likely to be more successful students, potentially reducing education costs as they grow through the system, communities — and the state Legislature — have been unwilling to gamble those initial funds to make widespread preschool accessible.

Part of the issue, too, is that those controlling public funding are reticent about trying something new if it might not work out. Once such a program is in place, how could a town, or the state, then pull the plug? Parents would be outraged. Under Pay for Success, however, the investor has every right to shut it down if it’s not reaching the goals set out under the contract.

In a Pay for Success project in Salt Lake City, Goldman Sachs put up the cash for about 100 children to attend preschool, and saw test scores meet the set goals in kindergarten, meaning the state of Utah paid back the investment from saving to its special education budget.

The idea is also applicable for a variety of purposes. One program in New York, attempting to address recidivism among juvenile inmates at Rikers Island, didn’t meet its goal, and investors — including Golman Sachs again; Watters says that firm is committed to Pay for Success projects because it, and other companies, gain tax credits for charitable investments, whether they make a profit or not — lost money. But New York’s corrections department still learned something about its juvenile inmates and the program’s flaws. That’s also a valuable part of the equation. In Denver, a Pay for Success program is setting up permanent supportive housing as a way to deal with homelessness.

We typically frown on the favorite cliché of bureaucrats: the “win-win” situation. In this case, though, we might go as far as to call it a “can’t-lose” deal.