BILL ANALYSIS �
AB 260
Page 1
Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 260 (Gordon) - As Amended: April 24, 2013
Policy Committee: Human
ServicesVote:7 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill extends the individualized county child care subsidy
plans program for San Francisco County until July 1, 2016 and
makes the program permanent for San Mateo County. Specifically,
this bill:
1)Extends the San Mateo County individualized county child care
subsidy plan program indefinitely.
2)Extends the San Francisco County program for an additional two
years, until July 1, 2016.
3)Requires San Francisco to submit a report on the pilot
project's operation to the Legislature, the Department of
Social Services (DSS) and the California Department of
Education (CDE) on or before December 31, 2014.
4)Requires both counties to submit annual reports on the success
of their county plan to the Legislature, DSS, and CDE.
FISCAL EFFECT
Presumably, without the current pilot project that provides both
San Francisco and San Mateo to reimburse providers above the
current rate and allows them to extend eligibility to families
that would otherwise not qualify for subsidized child care, both
counties would again to return a portion of their funding each
year. If they were unable to spend 15% of their contracted
amounts, San Mateo would likely return approximately $2.5
million in unspent child care funding and San Francisco would
return approximately $7 million. That funding would be
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redistributed in subsequent budget years and would be a
combination of GF, Prop 98 funding and federal funds.
COMMENTS
1)Rationale . The intent of this bill is to ensure the
continuation of the pilot projects in San Mateo and San
Francisco. The author believes that both projects have proven
to be successful and should continue. In addition, continuing
the projects allows families to continue to receive their
subsidized child care without interruption.
According to the author, unless legislative action is taken,
these county projects will end, resulting in an unnecessary
return to the problems that affected children, working
families and child care programs in San Mateo and San
Francisco prior to the creation of the pilots. The author
notes, this bill does not make sweeping changes in state
policy, but rather extends a current policy which authorizes
San Mateo and San Francisco counties to maximize the efficient
use of child care subsidy funds in order to meet local
conditions.
2)Background . The San Mateo County pilot was established in 2004
and the San Francisco pilot in 2006. Both were established in
response to the unintended consequences of living in a high
cost county has on needy and otherwise eligible families and
the ability of subsidized child care programs to accept and
serve them. A low-income family who earns just enough money
to meet the high costs of housing could inadvertently be
deemed as having too high an income to qualify for subsidized
child care, and the statutorily established uniform statewide
reimbursement rate for subsidized care is wholly insufficient
for agencies to cover their program and operational costs.
As a result, child care subsidy funds allocated to these two
counties were not being fully expended because too many
low-income families were being deemed ineligible due to the
high cost of living, and provider reimbursement rates were
insufficient to cover the cost of care. Since slots went
unfilled, subsidies went unspent.
Through the pilot, San Mateo and San Francisco County are
provided limited local flexibility with increased state
oversight to revise their eligibility and need determinations,
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adjust their reimbursement rates and family fees based upon a
local evaluation and assessment, and modify their funding
requirements.
This allows both counties to use the funds they would have
otherwise not earned, and reinvest that in providers through
increased reimbursement rates. For example, prior to the
pilot, San Mateo County returned upwards of 15% of their
overall subsidized child care allocation to the state. Using
an ongoing estimate of how much money would go un-earned, in
the 2010-11 fiscal year, San Mateo was able to reallocate
those funds among agencies that were able to increase their
enrollment. They were also able to provide increased
reimbursement rates ranging from 1.5 % to 8% above the
reimbursement rate. In San Francisco, the reimbursement rates
were increased to $36.63 for their center based agencies and
$39.46 for their programs operated by San Francisco Unified
School District.
Both counties are also able to adjust how they determine a
family to be eligible for subsidized care. In San Mateo
County, they switched from using the 75% of the benchmark
state median income to 85% of current state median income as
published by the U.S. Department of Health and Human Services,
the maximum allowable under federal regulations (which is the
maximum allowable under the pilot).
3)Why Not Make San Francisco Permanent ? San Francisco has not
been as successful as San Mateo in implementing the pilot.
Some of its challenges can be attributed to the initial design
of the pilot. At the outset, San Francisco's pilot mirrored
much of San Mateo's, which did not reflect the unique and
different challenges facing San Francisco. As a result, San
Francisco decreased, rather than increased its contract
earnings. They dropped from 98% to an average of 93% over the
first six years of the pilot.
In response, San Francisco and the California Department of
Education (CDE) conducted a review and adjustment of the pilot
for the 2011-12 fiscal year. The pilot has been revised and a
number of new elements have been implemented.
In the first year of the revised pilot, San Francisco
considerably reduced their under-earned amount for the 2011-12
fiscal year to 1.7 percent of their countywide service
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allocation, which is a substantial improvement. Additionally,
according to San Francisco, they are on track to further
reduce the amount of the under-earned service allocation for
the current 2012-13 fiscal year. It should also be noted that
San Francisco has also steadily increased their child days of
enrollment under the revised pilot.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081