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The State Is Cutting Our Subsidy. What Can I Do?

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Unfortunately and in spite of all of the political promises, funding cuts are becoming all too common for early education companies. 

The situation is difficult, but this problem has to be managed like any other.  You need to make sure your company is positioned properly or you need to re-position if you’re already caught in the net of a funding cut.  It is very important not to wait for the problem to fix itself, as increases in funding, like tax reductions, are very rare.  Some of the answers to this problem are as follows:

  1. Talk with other owners who have the same problem and take your concerns to your state and local politicians.  While this may sound like a generic, go-nowhere answer; it does work.  No politician wants to be on the news for taking education away from children.  Recently, we had several clients that were facing an increase in the minimum wage.  By itself, an increase in the minimum wage isn’t terribly difficult to navigate.  However, a minimum wage increase in a school that is not allowed to increase tuition rates to its clients is a very big problem.  Our clients organized and explained to their state political leader that a wage increase without the ability to raise tuition rates would force the closure of many centers and cause thousands of children to be without their early education facility.  While I’m sure this wasn’t the only factor under consideration, the minimum wage increase has been postponed while a better solution is found.
  2. Assuming your state allows it, increase other fees to compensate for loss of these subsidy tuition revenues.  A few of the fees that can be added or increased are fees for field trips, supplies, registration, graduation, transportation and regular tuition.
  3. Increase marketing to private pay clientele to help balance your clientele and become less dependent on subsidy reimbursement.
  4. Search for other local, state or federal programs that can be helpful to your company.  Remember, there are programs beyond subsidized tuition and the Federal Food program.

Once again, I hope this information has been helpful to you.  As we create these video and blog libraries for you, we want to speak to the topics that concern you most.  If you have any other questions or concerns, you can see us at bfsinc.net or call us at 800-467-1774.

Comment below to share your thoughts on this blog post.

(Legal Disclaimer:  Always consult the proper professionals before taking action.  By and before the use of the information provided herein, reader agrees that BFS® is not responsible for viewer’s actions related to said information.)

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