here for PDF format
of Meeting with Art Rolnick
Civic Caucus, 8301
Creekside Circle, Bloomington, MN 55437
Thursday, January 3,
Johnson, chair; Chuck Clay, Paul Gilje, Jim Hetland, John Mooty (by
phone), Jim Olson (by phone), Wayne Popham (by phone), and John Rollwagen
J. Rolnick, senior vice president and director of research, Federal
Reserve Bank of
Context of the meeting--The
Civic Caucus has been deeply concerned about the need for Minnesota
lawmakers to overcome politically partisan divisions and take the lead on
addressing critical issues facing the state. Comments by leaders seem to
indicate real potential that they could develop consensus on early
childhood development. Today the Civic Caucus is receiving background on
that issue from one of its strongest advocates, Arthur Rolnick.
Introduction and welcome--Verne
and Paul introduced Rolnick, who has devised a plan for market-based
scholarships for at-risk children from pre-natal to age five. Rolnick's
essays on public policy issues, including "The Economics of Early
Childhood Development" have gained national attention. He is senior vice
president and director of research at the Federal Reserve Bank of
Minneapolis and an associate economist with the Federal Open Market
Committee. He serves on several nonprofit boards, including the Minnesota
Council on Economic Education, greater Twin Cities United Way,
Citizens League, and Ready 4 K, an advocacy organization for early
childhood development. He has bachelor's and master's degrees from Wayne
State University, Detroit, MI, and a doctorate in economics from the University
Comments and discussion--During
Rolnick's comments and in discussion with the Civic Caucus the following
points were raised:
1. Distribution of background
materials--Rolnick distributed three handouts:
a. An article from January 2008 Twin Cities
Business "Saving the Future", discussing the connection between the
next generation of workers and early childhood development for at-risk
b. An article discussing the Minnesota Early
Learning Foundation (MELF) in Community Dividend, Issue 4, 2007,
published by the Community Affairs Department of the Federal Reserve Bank
c. A brochure that is just being distributed now,
announcing early childhood scholarships from MELF for low-income families
in a part of St. Paul north of University Avenue , between Lexington
Avenue and I-35E, known as the Frogtown and North End neighborhoods.
2. Background on (MELF)--MELF
is a private, non-profit organization, whose board of directors includes
CEOs from large companies, including Cargill, Best Buy, and Blue Cross
Blue Shield of Minnesota. Its executive director is Duane Benson, former
legislator and former head of the Minnesota Business Partnership.
Working with parents and at-risk children from before birth to
age five is the most cost-effective approach to assuring that children
from low-income families are ready for kindergarten, Rolnick said.
A key part of MELF is empowering parents, he said. Working
with mentors, parents are fully in charge of where scholarship money--up
to $13,000 a year--will be spent.
3. Private funding--MELF
has raised $30 million privately to cover costs of scholarships for the
Frogtown-North End demonstration, Rolnick said. Already MELF is being
contacted by national organizations, including foundations associated with
Bill Gates and Warren Buffett, plus a half-dozen governors around the
nation. Among cities interested are Omaha, Sioux Falls,
Hartford and Seattle. These areas are anxious to follow MELF's progress.
4. Keys to success--Rolnick
said his research has demonstrated that keys to success are (a) to start
early, before birth as necessary to give help to parents, (b) to make sure
parents are engaged at all steps in the process, including the right to
choose where the scholarship money is invested, and (c) to start with the
at-risk population. Working with this population offers the greatest
return on investment.
5. A $2 billion endowment is
sought--Rolnick said that Minnesota
needs a $2 billion endowment for early childhood development scholarships
for at-risk children. This approach will assure that the program
continues in perpetuity. Such an investment offers vastly more benefits
to the economy than comparable investments in sports stadiums, he said.
6. Data demonstrates substantial
return on investment--Rolnick
described a study conducted by the Highscope/Perry Preschool Study in
Ypsilanti, MI, which tracked 123 low-income African-Americans over 40
years, beginning when the individuals were three and four years old. For
five years in the mid-1960s, teachers worked with the children closely and
visited them once each week in their homes. The study demonstrated that
the children who received extra attention were more likely to graduate,
had lower crime rates, and had a higher income than their peers who didn't
He said the Highscope/Perry study report demonstrated that for
every dollar invested, $17 was returned on the investment. That figure
was calculated as money saved because the public didn't have to
incarcerate or remediate the formerly at-risk people, and money earned
because they got jobs and paid taxes.
demonstration now under way--Parents
in the Frogtown-North End area of St. Paul
now are receiving information and being invited to apply for
scholarships. Several organizations are gearing up as potential vendors,
including Montessori, Head Start, New Horizons, and the St. Paul
school system. Rolnick expects more vendors to appear.
A key requirement of vendors, he said, is that all children
who participate will be expected to pass a school readiness test given to
all four-year-olds. Currently about 50 percent of at-risk children pass
that test, he said. Vendors will be free to try different approaches for
In the first year 1,200 scholarships will be available, he
said, divided approximately as follows: 400 for pre-natal; 400 for
three-year-olds for two-year scholarships, and 400 for four-year-olds for
The pre-natal program will involve public health nurses who
will meet regularly with mothers, before and after birth, helping them
with diet and other aspects of care, including on-going interaction with
8. Staying free from political
and bureaucratic interference--MELF
had to reject some public money early on, because of potential
governmental requirements, he said. Some bureaucrats didn't want to
allow illegal immigrants, for example.
9. Some skepticism among public
educators--Some educators in
the K-12 system aren't happy with the plan, he said, because they fear
that allowing parents to choose their early childhood vendors could set a
precedent for some kind of voucher system for K-12.
10. MELF sunsets after five
years--MELF is the vehicle to
get the program started, he said. After five years a $2 billion endowment
should be generating $100 million a year that will fund the program
state-wide for the long-term.
11. Important to focus on
mothers--Some existing child
care programs don't focus on mothers, which is a key part of the MELF
12. Good cooperation from
praised the work of the St. Paul
for her cooperation in the MELF program.
13. Pre-natal mentors' role outlined--Rolnick
explained that a public health nurse will be assigned to serve as a mentor
to a family in the pre-natal category. MELF is working with a
metropolitan association of public health nurses and educators. A public
health nurse will be assigned to about 30 or 40 scholarship families and
be paid about $60,000 a year from MELF funds.
14. Evaluation tem hired--MELF has contracted with the
Stanford Research Institute, Rolnick said, to conduct evaluation of the
entire program and to state whether MELF succeeded or failed.
15. Whether impact of early
childhood development fades over time--Responding
to a question, Rolnick said the Perry pre-school study indicated that the
impact of gain in IQ faded with some students by the time they got to
third grade. However, these same children were more inclined to stay in
school, get jobs and stay off welfare. The program won't succeed 100
percent, he said, but it would be a huge benefit if 50 percent
Rolnick again emphasized that MELF is working towards
readiness for school as the main element of measuring success. If
four-year-olds are ready for school, that then reduces the need for other
expensive efforts, such as special education.
16. Scholarships will follow
the parent--If a Frogtown-North
End child receives a scholarship from MELF and the family moves out of the
neighborhood, the scholarship will still be in effect no matter where in
the family relocates.
17. Long-term legislative
effort--Rolnick said that
beginning efforts will occur in the 2008 Legislature to seek support for a
long-term $2 billion endowment to permanently fund early childhood
development in the state. MELF leaders believe it is reasonable that
one-third of the endowment would be paid for by the state of Minnesota;
one third, by private contributions, and one-third, by the federal
To illustrate that the $2 billion is within reach, Rolnick
said the gross state product is about $220 billion annually.
The one-third contribution to the endowment from the state
could come from an already-existing public land trust fund that was
established for education when Minnesota became a state in 1858, Rolnick
said. That trust fund is about $600 million, which represents nearly the
one-third state contribution for the proposed endowment. The trust fund
now generates about $30 million to $40 million a year that is given to
K-12 education. He recommends that the Legislature dedicate the trust
fund yield to early childhood development. To replace the $30 million to
$40 million a year that K-12 would lose, Rolnick said a state economic
development program known as JobZ provides questionable benefit, and that
$20 million to $30 million could be found there. In addition K-12 would
save dollars over the long term because of early childhood investment.
A Civic Caucus member observed that perhaps the state could
begin to distinguish between operating funds and investment. The early
childhood money needs to be regarded as an investment, not just paying for
operating expenses, the member said.
18. Potential leadership by
lawmakers--A Civic Caucus member observed that Governor
Pawlenty and Larry Pogemiller, Senate Majority Leader, while on opposite
sides of the political fence, both are on record for strong support of
early childhood development.
19. Parental involvement first;
said some existing providers of early childhood development want the
long-term organization established before the scholarship program is up
and running. Rolnick said MELF is concentrating on involving the parents
first and getting the program up and running. The bureaucracy, he said,
can come later, as needed.
20. Efforts not restricted to
Frogtown-North End--A similar
program for at-risk children is active in providing scholarships in
through an interfaith partnership with the Wayzata public schools, he
said. Also the Blandin Foundation has been providing scholarships in
northern Minnesota for some 135 children. The Wilder Foundation provided
a very positive evaluation of the Blandin effort, he said.
21. Where public school teachers
stand--Responding to a question, Rolnick said the teachers
union has been working mainly on trying to require all-day kindergarten
and hasn't emphasized the earlier years. Rolnick said he is seeking
support among leaders in the teachers union.
22. Whether to concentrate
exclusively on at-risk children--Rolnick said some critics
advocate that early childhood programs ought to be offered equally to all
children, irrespective of whether they are at-risk. Rolnick repeated his
point that the return on investment is highest among the at-risk
population. In the long run, he said, he expects that income
eligibility, now at 185 percent of federal poverty guidelines, will be
modified so that the dollar value of scholarships will gradually phase out
as income levels rise above the 185 percent level.
23. Thanks--On behalf
of the Civic Caucus, Verne thanked Rolnick for meeting with us this
The Civic Caucus
is a non-partisan,
tax-exempt educational organization. Core participants
include persons of varying political persuasions, reflecting
years of leadership in politics and business.
A working group meets face-to-face to
provide leadership. They are Verne C. Johnson, chair; Lee
Canning, Charles Clay, Bill Frenzel,
Paul Gilje, Jim Hetland,
John Mooty, Jim Olson, Wayne Popham and John Rollwagen.