In no uncertain terms, the St. Paul Federation of Educators has come out against a city ballot proposal that would raise property taxes annually for 10 years to pay for child care subsidies in the city.

“Solving the childcare desert in St. Paul should be done by centering the needs of families, educators and care providers, not public dollars for private companies,” wrote the teachers union, comparing the effort to school voucher programs in a statement released Tuesday to the St. Paul City Council and on social media. “SPFE does NOT support this levy, and encourages residents to vote NO.”

The strongly worded statement is the latest evidence that the ballot question has split the city’s progressive and education-minded advocates, some of whom worry that further raising the cost of housing through property taxes could hurt or even price out the very low-to-moderate-income population the initiative seeks to help.“I dispute their characterization that this is a voucher program,” said Gordie Loewen, a spokesperson for the “Yes for St. Paul Families” coalition. “The funding for this program follows the child, so it very well could follow the child to St. Paul Public Schools programs. Every licensed and legal, non-licensed program is eligible.”

The question that will appear on St. Paul’s November ballot asks voters to pre-approve $2 million in new property taxes in the first year, $4 million in the second year, $6 million in the third year, and so on until $20 million is raised in year 10, with the goal of creating a dedicated fund to pay for no-cost and sliding-fee-scale child care options in the community.

A 48-page program overview was presented to the council Wednesday by consultants People of Victory LLC, with the recommendation that the fund be managed by the city’s existing Office of Financial Empowerment. Subsidies would range from $3,000 to $8,000 per child, which would complement any other form of public assistance, such as the state’s early learning scholarships. The council plans to vote on whether to adopt the program framework on Nov. 6, once the results of the ballot question are determined.

Tight labor market, rising costs shutter providers

The ballot proposal is backed by the “Yes for St. Paul Families” coalition — previously known as the St. Paul All Ready for Kindergarten campaign, or SPARK — which is chaired by Halla Henderson, a St. Paul school board member. It’s also drawn backing from state Rep. Dave Pinto and St. Paul City Council members Rebecca Noecker, Nelsie Yang and HwaJeong Kim.

Proponents have pointed to escalating costs and limited openings for child care, especially infant care, and emphasized the importance of early learning programs in child development.

“Parents have had to leave the workforce to care for their kids,” Yang said Wednesday, addressing the council.

A tight labor market has added to woes for child care providers, many of whom are struggling to make a profit despite raising prices, according to a survey last year by the Federal Reserve Bank of Minneapolis. There were 33% fewer active child care licenses in Minnesota last year than a decade prior, with most of the decline coming from home day care providers. Infant care, an industry “loss leader” that tends to pay low wages, now has a tough time competing for workers.

“It’s the littlest ones, birth to 3, that have the least amount of investment and take the most to care for,” said Kim, addressing the council Wednesday.

More than 5,000 newborns to 5-year-olds live in poverty in St. Paul, according to the coalition, and the state is said to have the seventh most expensive child care in the country. That contributes to racial inequities when low-income children who have been priced out of early learning programs — disproportionately kids of color — enter school unprepared.

The St. Paul ballot question, however, does not explicitly require day cares to provide an educational curriculum. And the new fund would be overseen by the city, which does not traditionally administer social services, education or child care programs and has no department set up to inspect or evaluate them.

Leah VanDassor, president of the St. Paul Federation of Educators, said there are hundreds of children on waiting lists for public preschool, and a new program creating a “huge tax burden” would not alleviate that.

“It will basically be a voucher program. It’s a tax on the residents of St. Paul … and it won’t be going to public systems,” VanDassor said in an interview Wednesday. “That money is basically being privatized. It doesn’t actually expand the early education system — not at all. We’re not saying there’s no need for something. We’re saying this is not the solution. How is the money going to be monitored and managed?”

Nikole Jones, a consultant with People of Victory LLC, told the council Wednesday that consultants and a citizen advisory council could help launch the program until its administration is fully absorbed by new Office of Financial Empowerment staff. New city positions would include a program manager, customer service coordinator, program evaluator and translator.

“It’s a program that on the ground could serve families very well,” Jones said.

‘There’s a crisis now’

In April, consultants with MetrixIQ and Emmy Liss Strategies found that based on current funding and pricing assumptions, the project would serve more than 2,500 children annually by year 10, or between 4,000 and 7,000 kids over the course of the decade.

In other words, by the end of 10 years, the program will reach most St. Paul preschoolers in need but only about a third of infants and toddlers in families living within 185% of the federal poverty level. Expanding subsidies to all children in need, they said, and opening the program to the overall population would require a heavy infusion of additional state, county, school district or philanthropic funding. And, as costs of care grow, the number of kids served could drop.

St. Paul Mayor Melvin Carter’s office has estimated that to meet its objectives, the program budget would have to increase more than sixfold, to $121 million.

“I don’t know how exactly he arrived at that number, but there’s a crisis now, and just because we can’t financially help every family in the city doesn’t mean we shouldn’t do something now,” Loewen said. He noted the program would offer an online portal, or one-stop-shop for finding early childhood learning and child care openings, which could be used by any family citywide.

The ballot question has drawn opposition from some of the city’s most progressive voices, including the mayor and Council President Mitra Jalali. Also opposed is the St. Paul Area Chamber of Commerce, which has urged voters not to lock the city into what they’ve described as an untested, 10-year spending commitment backed by escalating property tax dollars.

“Our role should be to support the other agencies and providers in accessing the funds that they need, but it becomes another thing entirely … to take that on directly,” Jalali said on Wednesday.

The mayor’s 2025 budget proposal calls for a 7.9% tax levy increase, and fiscal observers worry there could be more tax hikes ahead if downtown properties continue to lose value and other aspects of the city’s tax base — like businesses and multi-family housing — don’t expand.

“It will be more expensive than the anticipated $20 million-over-10-years proposal,” wrote B. Kyle, president of the St. Paul Area Chamber of Commerce, in a statement to chamber members this month. “Given that St. Paul doesn’t even have money for its roads, offering ‘free’ pre-k by raising property taxes even further seems especially unwise. The city is challenged to serve its residents’ needs within existing city departments and programs. And those needs are growing. We need to focus on the more immediate issues of public safety and infrastructure.”