Multnomah County is harnessing a "very volatile revenue source" as it works to offer free universal preschool to all local 3- and four-3-olds as soon as September 2022.
The money comes from a voter-approved marginal income tax, which begins at 1.5% for couples making more than $200,000 annually and 3% for couples earning more than $400,000.
"This is going to be a very volatile revenue source. Income taxes in general bounce around," said county economist Jeff Renfro. "Because it's on high earners and a relatively small portion of the population … there is going to be a lot of variance from year to year."
Another problem? Finding enough classrooms and cubbies to serve the 15,000 early learners expected to enroll each year if the Preschool for All program reaches full capacity by the end of the decade.
The number of regulated child care providers in Multnomah County reached 1,319 in February 2020 — plummeted to 440 facilities amid the pandemic — before climbing back up to 839 at present, with no guarantee the roughly 500 missing providers will reopen. Willamette Week first that Portland's largest preschool, Childswork Learning , is expected to close due to a parking dispute.
"Like other industries disrupted by the pandemic, providers had new rules, fear and uncertainty about how to stay safe and protect their families," said Leslee Barnes, who was appointed director of the county's Preschool & Early Learning Division in March.
"It's important to remember that Multnomah County was a child care desert before, and most providers operate on thin margins," she added.
County officials plan to spend $60 million standing up the early education initiative in the fiscal year that begins in July, which includes saving for future years when preschool tax revenue won't cover its costs.
Over the 10 years beginning fiscal year 2026, county number crunchers predict a total of $163 million in anticipated expenses that won't be covered by revenue, though they expect to save that much during the first few years. The county socked away $36 million alone during the current fiscal year.
officials will spend the summer crafting statistical models and begin presenting updated revenue forecasts in the fall.
Other of the Preschool for All plan include a ban on suspensions and expulsions, as well as a 2020 starting wage of $19.91 an hour for assistant teachers. The county will adopt a neutral stance if the preschool workers seek to unionize.
The city of Portland's Revenue Division will collect the income tax, which is due April 15 and will be deducted by default by employers. The county will pay out $14.4 million to implement tax collection, with ongoing costs expected to eventually level off around $6 million a year.
"It seems like a tremendous amount of the revenue to be giving to the administration of the tax," said Commissioner Sharon Meieran, suggesting the county explore hiring its own tax collectors.
