BILL ANALYSIS Ó
AB 188
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Date of Hearing: March 24, 2015
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Chu, Chair
AB
188 (Cristina Garcia) - As Introduced January 27, 2015
SUBJECT: Child care: alternative payment providers:
reimbursement rates: eligibility requirements
SUMMARY: Increases the allowable reimbursable amount included
in contracts for alternative payment programs for child care.
Specifically, this bill: Adds a 3% reimbursement rate for
making eligibility determinations to the allowable reimbursable
amount for an alternative payment program contract.
EXISTING LAW:
1)Establishes the California Child Care and Developmental
Services Act (CCDSA) for the purpose of providing a
comprehensive, coordinated, and cost-effective system of child
care and development services, as specified, for children from
infancy to 13 years of age, and their parents, through full-
and part-time programs. (EDC 8200 et seq.)
2)States the intent of the Legislature that all families have
access to child care and development services, as specified,
regardless of ethnic status, cultural background, or special
needs, and the intent that subsidized child care and
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development services be provided to eligible families, to the
extent funding is available. (EDC 8202)
3)Defines alternative payments as payments made by one child
care agency to another agency or provider for the provision of
child care and development services, and payments that are
made by an agency to a parent for the parent's purchase of
child care and development services. Further defines
alternative payment program as a local government agency or
nonprofit organization that has contracted with the California
Department of Education (CDE), as specified, to provide
alternative payments and to provide support services to
parents and providers. (EDC 8208(a) and (b))
4)Authorizes the use of child care and development funds, as
specified, for alternative payment programs in order to
maximize parental choice in selecting an appropriate child
care setting. (EDC 8220)
5)Requires an alternative payment program reimbursement to
include the cost of child care paid to a child care provider
in addition to the administrative and support services costs
for the alternative payment program, and caps the amount for
administrative and support services at 17.5% of the total
contract amount. (EDC 8223)
6)Further prohibits administrative costs from exceeding the
costs allowable for administration under federal requirements.
(EDC 8223)
FISCAL EFFECT: Unknown
COMMENTS:
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Alternative Payment Programs(APPs): There are currently 76 APPs
contracted with CDE, funded through state and federal funds, to
provide an array of support and payment services that enable
eligible low-income families to access subsidized child care.
APPs do not provide direct child development services or
programs, rather they help families arrange child care services
and make payments directly to the child care provider selected
by the family. This comes in the form of subsidized child care
vouchers they provide to families who are participating in
welfare-to-work activities under the California Work
Opportunities and Responsibility to Kids (CalWORKs) program, or
who are low-income but do not qualify for CalWORKs. More
broadly, APPs are charged with increasing parental choice in
child care and addressing the individual needs of the families
they serve.
Typically, a family that receives a voucher from an APP will
then be referred to a local child care resource and referral
(R&R) network. The R&R network, also funded through state and
federal dollars, will assist a family by helping identify and
access the appropriate and desired child development program for
the child or children. Child care vouchers can be used to
access child care at either a Title 5 or Title 22 child
development center or with a license-exempt child care provider
who meets certain criteria. However, due to a lack of state
resources and ongoing cuts within the CCDSA, access to programs
able to accept vouchers is limited. Should a family be unable
to find appropriate care, they will be placed on a waiting list,
if one is available.
APPs are funded through an administrative cap set by statute,
which requires the total cost for administrative and support
services to not exceed 17.5% of their overall total contract
amount, with the rest of the contract amount consisting of the
actual cost of child care that is paid to providers. The
administrative and support services amount was originally capped
at 20% of the total contract amount. However, due to the
state's ongoing budget deficits and funding cuts over the past
ten years, the cap was lowered to the current percentage. This
has resulted in many APPs having to lay off staff, struggling to
pay competitive wages, and not being able to fill open positions
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while they are mandated to serve increasing numbers of families
in need of child care. APPs currently support over 213,000
children and 142,000 families.
Need for the bill: According to the author, "APPs are only
funded based on the reimbursements to providers that are
actually 'put out the door' in the form of a child care payment.
The child care payment is made once a working family is deemed
income eligible for a child care subsidy and has chosen a child
care provider. All of the work leading up to the actual
enrollment of an income eligible family that will result in a
child care payment to a provider is not reimbursed?Without a
remedy, APPs will experience greater caseworker turnover,
families needing child care will have to wait longer and longer
times in order to begin the process, and existing families and
children will suffer greater holes and access in their support
system safety net?It is hugely important that we provide crucial
funding to community based agencies that will allow them to more
fully meet the needs of working families needing child care,
will support protection of public dollars by only enrolling
those working families that meet stringent eligibility criteria,
and that will lead to a greater strengthening of our 'safety
net' programs."
Staff comments: The additional 3% contract reimbursement under
this bill is specifically provided for making eligibility
determinations, which would be added to the total allowable
reimbursement for administrative and support services. While
"administrative and support services" is broad and lacking an
explanation of what it entails, it encompasses all of the
functions the APPs carry out to assist parents in finding and
maintaining child care, and it does not simply include overhead
costs. Rather than simply increase the allowable reimbursement
for administrative and support services from 17.5% to 20.5%, the
3% is clearly added in a way that would not be perceived as
offsetting the amount in the APP contract that is paid to
providers for child care. However, by adding 3% explicitly for
making eligibility determinations, this bill could have the
effect of limiting the APPs flexibility in assisting families,
thereby not really helping the APPs provide overall high quality
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services and meet families' individual needs. Should this bill
move forward, the author may wish to provide more details around
how the additional 3% contract amount will be used.
REGISTERED SUPPORT / OPPOSITION:
Support
CAPPA Children's Foundation
Child Care Links
Child Development Associates, Inc.
Child Development Resources of Ventura County, Inc.
Community Action Partnership of San Luis Obispo
Community Child Care Council (4C's) of Alameda County
Community Resources for Children
Controltec, Inc.
Davis Street Family Resource Center
Family Resource & Referral Center
Mexican American Opportunity Foundation
North Coast Opportunities, Inc.
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Santa Cruz County Parents Association
Sierra Nevada Children's Services
Supportive Services, Inc.
Valley Oak Children's Services
Opposition
None on File.
Analysis Prepared
by: Myesha Jackson/HUM. S./(916) 319-2089