Cost Benefit Analysis of First 5 Kern-Funded Programs

Early childhood education programs play an important role in child family-to-school transition. In 1998, California voters passed Proposition 10, the California Children and Families Act, which levied a 50-cent tax on each pack of cigarettes and other tobacco products to finance programs for children ages 0-5. In less than two decades, First 5 Kern has administered more than $180 million from Proposition 10 to support early childhood services. Following the state statute to "use outcome-based accountability to determine future expenditures", this Cost-Benefit Analysis (CBA) includes three components: (1) configuration of the trend in program costs and benefits during 2010-2017; (2) review of comparable programs to support the transfer of long-term benefits from well-documented projects to First 5 Kern-funded programs; and (3) bootstrapping and value-added assessments of CBA outcomes across the adjacent funding cycles. Five research questions have been examined extensively in this trend data analyses across 39 programs: (1) How many programs have reached a status to pay for themselves with First 5 Kern funding? (2) What is the contribution of First 5 Kern, through partnership building, in improving the programs' financial conditions? (3) What programs would have been otherwise unavailable without First 5 Kern funding? (4) What programs became more sustainable, due to First 5 Kern's support for external fund leveraging, between the adjacent funding cycles? (5) What is the long-term return of First 5 Kern-funded programs and services? Value-added assessments have been conducted to discount the service benefit and cost in the 2018 dollar value. Bootstrapping methods were adopted to construct 95% confidence intervals for the benefit-cost ratio estimation. The result showed service benefits at least double Proposition 10 investments in Kern County during the seven-year period.