BILL ANALYSIS �
AB 260
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CONCURRENCE IN SENATE AMENDMENTS
AB 260 (Gordon)
As Amended September 4, 2013
Majority vote
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|ASSEMBLY: |78-0 |(May 28, 2013) |SENATE: |39-0 |(September 9, |
| | | | | |2013) |
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Original Committee Reference: HUM. S.
SUMMARY : Extends the individualized county child care subsidy
pilot plans (pilot) for San Mateo County and San Francisco
County. Specifically, this bill :
1)Extends the sunset date for the San Mateo pilot from January
1, 2015, to July 1, 2018.
2)Extends the sunset date for the San Francisco County pilot
from July 1, 2015, to July 1, 2016, and phases out the program
between July 1, 2016, and July 1, 2018.
3)Requires San Francisco County to submit a report evaluating
the pilot, which shall include a recommendation as to whether
the pilot project should be made permanent, to the
Legislature, the Department of Social Services (DSS) and the
California Department of Education (CDE) on or before December
31, 2014.
The Senate amendments :
1)Delete language making the San Mateo pilot permanent.
2)Extend both the San Francisco and San Mateo pilot programs
until July 1, 2016, and July 1, 2018, respectively.
3)Make aligning changes to reflect current statute as amended by
the Education Omnibus Trailer Bill (AB 86 (Budget), Chapter
48, Statutes of 2013).
AS PASSED BY THE ASSEMBLY , this bill:
1)Changed the sunset date for the San Mateo County pilot from
January 1, 2016, to July 1, 2014, and allows it to continue as
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a permanent program thereafter.
2)Changed the statutory inoperative and repeal dates for the San
Mateo County pilot from January 1, 2016, to July 1, 2014, and
from January 1, 2016, to January 1, 2015, respectively.
3)Extended the San Francisco County program for an additional
two years, until July 1, 2016.
4)Required both San Mateo and San Francisco Counties to submit a
report on the pilot project's operation to the Legislature,
the DSS and the CDE on or before December 31, 2014.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)San Mateo subsidy plan: Potentially substantial loss of state
savings beginning in 2014-15; likely in excess of $1 million
dollars annually.
2)San Francisco subsidy: Substantial loss of state savings in
2015-16; likely in the low millions of dollars.
3)Oversight: Minor workload savings to the CDE; the department
would no longer have administrative workload associated with
the requirements of the pilot itself.
COMMENTS :
History of the pilot and challenges to provide subsidized child
care in high cost counties . 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 Title 5 programs to accept and serve
them. On the one hand, 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. On the other, the statutorily
established State Reimbursement Rate (SRR), which is the 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
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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,
adjust their reimbursement rates and family fees based upon a
local evaluation and assessment, and modify their funding
requirements, as specified.
This allows both counties to use the funds they would have
otherwise not earned and reinvest that into their 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 estimation of how much money would go un-earned, in the
2010-11 fiscal year, San Mateo was able to reallocate those
funds amongst its 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 SRR. In
San Francisco, the reimbursement rates were increased from
$34.38 to $36.63 for their center based agencies and $39.46 for
their programs operated by San Francisco Unified School
District, respectively.
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). According to San Mateo County in
their initial 2004 subsidy plan:
Although this represents a 39% increase in the income
eligibility threshold, this new threshold is only 67%
of San Mateo County's median income from the 2000
Census and still falls well below the County
self-sufficiency standards developed by Wider
Opportunities for Women, the San Mateo County Human
Services Agency or the California Budget Project.
In San Francisco, eligibility was set at 80% of state median
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income, which allowed San Francisco to retain 392 children who
would have been otherwise deemed ineligible under the statewide
rate of 70% of state median income for the 2011-12 fiscal year.
Evaluation of the pilot programs :
San Mateo County : San Mateo County has been successful in
meeting the goals of the pilot. Over the first six years of the
pilot, San Mateo consistently increased their child days of
enrollment, which has helped to steadily increase their contract
earnings. According to their independent evaluation, they
increased their earnings percentage from 88% in the 2003-04
fiscal year, which was the year prior to the implementation of
the pilot, to 96% the following fiscal year. On average, San
Mateo earned just over 97% of their total direct service funds
over the first seven years of the pilot.
City and County of San Francisco : San Francisco has had a few
more challenges in implementing the pilot. Some of its
challenges can be attributed to how the pilot was implemented.
At the outset, San Francisco's pilot mirrored much of San
Mateo's, which, in retrospect was not the best use of the pilot
as it did not reflect the unique and different challenges facing
San Francisco. Although this was not the only challenge facing
its pilot, it was significant. 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 CDE conducted a holistic
review and adjustment of the pilot for the 2011-12 fiscal year.
As a result, the pilot was appropriately revised and a number of
new elements were implemented. According to the independent
evaluation of San Francisco's 2011-12 fiscal year, the revised
pilot:
? draws upon lessons learned in the original pilot and
focuses on unique aspects of the San Francisco Pilot
project, such as technical assistance and the
beginning of an enhanced CEL called the San Francisco
Child Care Connection (SF3C).
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% of their countywide service allocation,
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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 : Chris Reefe / HUM. S. / (916) 319-2089
FN: 0002735