BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 260
AUTHOR: Gordon
AMENDED: April 24, 2013
FISCAL COMM: Yes HEARING DATE: June 19, 2013
URGENCY: No CONSULTANT: Lynn Lorber
SUBJECT : San Francisco and San Mateo county child care
subsidy plans.
SUMMARY
This bill makes permanent the San Mateo County
individualized child care subsidy plan and extends by two
years the San Francisco County individualized child care
subsidy plan.
BACKGROUND
The state subsidizes child care and development through two
categories of providers, one of which is providers with a
direct service contract with the California Department of
Education (licensed Title 5 programs). These child care
providers must meet education and training standards that
exceed those of Title 22 child care providers (licensed and
license-exempt), as well as provide an educational
component. Title 5 providers are reimbursed at the
Standard Reimbursement Rate, which is currently $34.38 per
child per day.
Current law authorizes a pilot project in San Mateo County
(since 2004) and San Francisco City and County (since 2006)
that allows the counties to develop and implement an
individualized county child care subsidy plan in
recognition of the high-cost of living in those counties.
The plans allow Title 5 child care providers in the county
to supersede state requirements in only the following
factors:
1) Eligibility criteria including age, family size, time
limits, income level, inclusion of former and current
CalWORKs participants, and special needs
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considerations.
2) Fees, including family fees, sliding scale fees, and
co-payments for those families that are not income
eligible.
3) Reimbursement rates.
4) Methods of maximizing the efficient use of subsidy
funds including multi-year contracting with the
California Department of Education for center-based
child care, and interagency agreements that allow for
flexible and temporary transfer of funds among
agencies.
(Education Code 8335.1 and 8341)
Individualized child care subsidy plans must be implemented
within existing funds. No additional state funding is
provided to either San Francisco or San Mateo counties for
individualized child care subsidy plans.
Both counties have been required to submit period reports
to the Legislature, and are required to terminate and phase
out the individualized county child care subsidy plans as
follows:
1) San Mateo is to terminate the plan on January 1, 2014,
and phase out until January 1, 2016, at which time the
county is to implement the state's requirements for
child care subsidies.
2) San Francisco is to terminate the plan on July 1,
2014, and phase out until July 1, 2016, at which time
the city and county is to implement the state's
requirements for child care subsidies.
The individualized child care subsidy plan is phased out by
not enrolling additional children under the alternative
criteria once the plan is terminated. As children age-out
or disenroll for other reasons, fewer and fewer children
meet the criteria of the individualized plan.
ANALYSIS
This bill makes permanent the San Mateo County
individualized child care subsidy plan and extends by two
years the San Francisco County individualized child care
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subsidy plan. Specifically, this bill:
San Mateo
1) Extends by 6 months the individualized child care
subsidy plan, from January 1, 2014, to July 1, 2014.
2) Authorizes the individualized child care subsidy plan
to continue to be implemented permanently.
3) Sunsets the existing provisions and recasts nearly
identical language for the continuance of the
individualized child care subsidy plan with the
existing requirement for showing increases in
enrollment and the role of the Department of Social
Services in reviewing outcome measures.
4) Requires the county to prepare and submit to the
Legislature, the Department of Social Services, and
the California Department of Education, an annual
report, until January 1, 2018, summarizing:
a) The success of the county's plan.
b) The ability to maximize the use of funds.
c) Improve and stabilize child care in the
county.
San Francisco
1) Extends the sunset on the individualized child care
subsidy plan for two years, from July 1, 2014, to July
1, 2016, and phase out period (from 2014-2016 to
2016-2018).
2) Changes the amount of the increase in enrollment that
programs must show from 2004-05 levels to 2010-11
levels, and requires the increase to also be
proportional to the total contract maximum
reimbursable amount. These changes reflect updated
enrollment expectations and funding levels.
3) Extends by six months the due date of the final report
to the Legislature, and adds the requirement that the
report include an evaluation of the pilot project's
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operation between the 2011-12 and 2013-14 fiscal
years, and provide a recommendation as to whether the
pilot project should continue as a permanent program.
(Currently, the report must only summarize the impact
of the plan on the child care needs of working
families.)
STAFF COMMENTS
1) Need for the bill . According to the author, "The
original pilot project was created because state
subsidized child care policies did not reflect the
fiscal reality of high-cost counties, where the cost
of living and doing business is well beyond the state
median. State reimbursement rates for center-based
child care providers under Title 5 are insufficient to
cover a reasonable amount of the actual cost of care
in high-cost counties. Prior to the creation of the
pilot projects, some contractors were forced to close
programs or relinquish contracts, and families faced a
greater shortage of providers while the center-based
funds were being underutilitized."
2) San Mateo . The report of the San Mateo County
individualized child care subsidy plan for the 2010-11
fiscal year found that affected programs increased the
aggregate child days of enrollment by 3.4% over the
baseline year (2002-03), and allowed families with
slightly higher incomes to retain child care
eligibility. The report, based on year seven of the
pilot, concluded that San Mateo's pilot project has
shown success in meeting several of the pilot's goals.
The individualized child care subsidy plan was authorized
to be implemented as a pilot to ensure the desired
outcomes are achieved. The numerous reports since the
inception of the pilot project have consistently shown
to benefit families in need of child care. The state
can allow the pilot project to continue by further
extending the sunset, as has been done several times,
or by removing the sunset to allow the individualized
child care subsidy plan to continue permanently.
3) San Francisco . Prior reports of the San Francisco
County individualized child care subsidy plan
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indicated that the pilot project was not experiencing
the desired results, such as increased enrollment, and
a significant amount of funds were being returned to
the State. In response, San Francisco County and the
California Department of Education conducted a review
of the pilot and made adjustment for the 2011-12
fiscal year. The report for the 2011-12 fiscal year
found that many of the outcomes are encouraging but
should be explored further. This bill initially
proposed to make the San Francisco County pilot
project permanent, but was amended in the Assembly to
instead extend the sunset for an additional two years
to allow the modified individualized child care
subsidy plan to yield further data on the benefits of
the program.
4) Foregone savings . This bill would not result in
additional state costs. As demonstrated by these
pilot projects, providing the higher reimbursement
rates or child care slots to children from families
with higher income, within existing funds is possible
by using unspent funds that would otherwise be
returned to the state. Reverted funds result in
"savings" to the state but would also result in fewer
children served through subsidized child care.
5) Budget action . AB 86 (Committee on Budget), approved
by the Legislature on June 14, 2013, extends both the
San Francisco and San Mateo individualized child care
subsidy plans for an additional year. The Budget Act
took a more moderate approach to avoid making larger
policy decisions outside of the policy committee
process. The prior two extensions where implemented
through the Budget Act. This bill exceeds the
authority granted by the Budget Act and would chapter
out those provisions if enacted.
6) Prior legislation . SB 1410 (Corbett, 2008) would have
allowed Title 5 child care programs that are
reimbursed at a lower rate than license-exempt
providers in that county to be reimbursed at a higher
rate. SB 1410 was held on the Senate Appropriations
Committee's suspense file.
SUPPORT
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City and County of San Francisco
County Welfare directors Association of California
San Mateo County Board of Supervisors
Urban Counties Caucus
OPPOSITION
None on file.