BILL ANALYSIS Ó
AB 765
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Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Kansen Chu, Chair
AB 765
(Ridley-Thomas) - As Amended March 26, 2015
SUBJECT: Child care and development: reimbursement rates
SUMMARY: Raises the standard reimbursement rate for subsidized
child care.
Specifically, this bill:
1)States a number of legislative findings and declarations
related to teachers in state-funded child development programs
and the low wages and lack of benefits they often receive.
2)States that the standard reimbursement rate (SRR) is not
intended to fund mandated costs imposed upon child development
programs due to actions of law relating to minimum wage
requirements, health insurance requirements, new or increased
fees, new or expanded program requirements, or other cost
increases due to legislative action.
3)Requires, in addition to application of the specified
cost-of-living adjustment (COLA), the SRR to be raised as
needed to provide a living wage, reasonable health insurance,
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and retirement benefits for employees in order to support the
recruitment and retention of skilled and trained teachers, to
support the financial stability of programs and educational
quality, and to achieve gender pay equity.
4)Defines "cost-of-living adjustment" to mean an annual increase
in funding and the SRR to maintain buying power as a result of
inflation, and requires the COLA as currently calculated to at
least be equal to the amount of the inflation adjustment
applied to K-12 school district revenue limits, as specified.
EXISTING LAW:
1)Establishes the Child Care and Development Services Act to
provide child care and development services as part of a
coordinated, comprehensive, and cost-effective system serving
children from birth to 13 years old and their parents
including a full range of supervision, health, and support
services through full- and part-time programs. (EDC 8200 et
seq.)
2)Defines "child care and development services" to mean services
designed to meet a wide variety of children's and families'
needs while parents and guardians are working, in training,
seeking employment, incapacitated, or in need of respite.
(EDC 8208)
3)States the intent of the Legislature that all families have
access to child care and development services, through
resource and referral where appropriate, and regardless of
demographic background or special needs, and that families are
provided the opportunity to attain financial stability through
employment, while maximizing growth and development of their
children, and enhancing their parenting skills through
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participation in child care and development programs. (EDC
8202)
4)Requires the Superintendent of Public Instruction to
administer general child care and development programs to
include, among other things as specified, age- and
developmentally-appropriate activities, supervision, parenting
education and involvement, and nutrition. Further allows such
programs to be designed to meet child-related needs identified
by parents or guardians, as specified. (EDC 8240 and 8241)
5)Requires the Superintendent to implement a plan that
establishes reasonable standards and reimbursement rates for
subsidized child care, as specified. Sets the amount of the
SRR. (EDC 8265)
6)Requires the Superintendent to establish a family fee schedule
for subsidized child care, as specified, contingent on income
and subject to a cap. (EDC 8273)
FISCAL EFFECT: Unknown
COMMENTS:
Subsidized child care and the Standard Reimbursement Rate:
Families are typically eligible for subsidized child care if
their income is less than 70% of the 2007-08 State Median Income
(about $42,000 per year for a family of 3), if the parents have
a need related to work, training, or education, and if the
children are up to 12 years old (or 21 years old for youth with
exceptional needs). The state's subsidized child development
programs, with the exception of CalWORKs Stage 1 child care, are
overseen by the California Department of Education (CDE). The
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Department of Social Services (DSS) administers CalWORKs Stage 1
child care and is also responsible for the licensing and
regulation of child day care centers and family child care
homes.
CDE-administered subsidized child care can be provided through
contracts; contracted providers are funded through the receipt
of the Standard Reimbursement Rate (SRR) based on the number of
children enrolled and the hours of care provided. Families may
also be required to pay a family fee if they earn above a
certain threshold income for their family size. Care is
provided in child care centers and family child care homes.
The SRR is set in statute and is supposed to be increased using
a COLA each year. However, this adjustment has been suspended
in years past, remaining the same, at $34.38 for a full day of
care, from fiscal year 2007-08 through 2013-14. The SRR was
increased by five percent in the Budget Act of 2014, and is
therefore $36.10 for fiscal year 2014-15. Adjustment factors
are applied to the SRR in some instances to reflect the
increased cost of care for the different ages and needs of
children.
The SRR COLA is set in statute, as is the elementary and
secondary school district revenue limit COLA. However, they are
calculated differently. Also, as previously stated, the SRR
COLA has been suspended repeatedly in recent years.
Gender pay inequity: The continued persistence of a gender pay
gap in the state and country is well-recognized. According to
2014 data from the American Association of University Women
(AAUW), in the United States, women made 78 cents for every
dollar men did. This ratio was slightly better in California,
where median earnings for women were $42,199, equaling 84% of
men's median earnings of $50,268.
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However, simply looking at the difference in pay between men and
women can miss other dynamics, particularly those pertaining to
race and ethnicity. A report from the National Women's Law
Center looking at 2012 census data for the United States found
that, while women overall were paid 77 cents per every dollar
earned by their male counterparts, parsing these data showed how
women fared differently by race and ethnicity. White,
non-Hispanic women earned 78% of what white, non-Hispanic men
did. Asian women earned 87% of what these same (white,
non-Hispanic) men did. Black women earned 64% compared to
white, non-Hispanic men, and Hispanic women earned 54% compared
to them.
The gender pay gap may, in certain industry sectors, be both
cause and effect of "typically male" and "typically female"
jobs. Evidence indicates that the child care workforce in
California is predominantly female. For example, a 2006 study
by The California Child Care Resource and Referral Network and
the Center for the Study of Child Care Employment, housed in the
Institute of Industrial Relations at the University of
California at Berkeley, looked at a random sample of 1,800
family child care providers in the state and found that 96% of
the study sample was female.
Living wage: A "living wage" is often used to refer to the
amount of income necessary for workers to meet the basic needs
of themselves and their families, typically including housing,
food, health care, child care, transportation, taxes, and
miscellaneous costs. Methodologies for determining living wages
vary, but they tend to involve calculations at the regional
(city or county) level in order to account for variance in
housing costs. Additionally, living wage estimates also tend to
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vary by family size, given the differing child care needs
associated with the number and ages of children.
Living wages tend to be significantly higher than the minimum
wage. For example, the Insight Center for Community Economic
Development has developed the family economic self-sufficiency
standard. The following are the 2014 hourly living wages per
this standard, by county, for one adult with two preschool-age
children:
Alameda County = $36.28/hour
Los Angeles County = $35.48/hour
Riverside County = $29.09/hour
Sacramento County = $27.28/hour
San Diego County = $33.96/hour
Santa Clara County = $40.26/hour
Santa Cruz County = $38.99/hour
Need for this bill: According to the author, "This bill would
help to build a strong and professional early care and education
workforce that is defined by high-quality, reasonable
compensation, and job retention and security. The bill would
clarify that it is the intent of the Legislature to provide
child development programs with annual cost of living
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adjustments equal to the inflation adjustments given to K-12
education, as well as to rebuild wages, benefits and financial
stability in these programs - including the elimination of
gender pay inequity. Furthermore, the bill would help to ensure
and enhance the ability of these programs for young children to
meet the high educational standards required by state and
federal law, and to retain skilled and highly-trained teachers
by increasing the Standard Reimbursement Rate."
Staff comments: Child care and development programs are a
crucial support for working families: they enable parents to go
to work to and earn an income for their families, and at the
same time, they can provide children with the care and education
that will help form the strong developmental foundation that is
known to contribute to a number of positive outcomes later in
life. The providers of this care play a vital role in the
success of early care and education programs, and it is widely
recognized that all too often, the wages associated with this
important work are low.
This bill's goals of addressing gender pay inequity, the
recruitment and retention of quality care providers, and the
financial stability and educational quality of subsidized child
care programs are laudable. Furthermore, its efforts to
increase the SRR to better fund early care and education
providers point to the need for a well-supported subsidized
child care system. In particular, this bill's proposal to keep
the SRR COLA on par with the K-12 school district revenue limit
COLA may be one way to better support this system. However,
other components of this bill may unintentionally conflict with,
or at least complicate, this approach. Should this bill move
forward, the author may wish to consider the following:
1)The intent language stating that, "The standard reimbursement
rate is not intended to fund mandated costs imposed upon child
development programs due to actions of law relating to minimum
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wage requirements, health insurance requirements, new or
increased fees, new or expanded program requirements, or other
cost increases due to legislative action," may be interpreted
to mean that the SRR should not be used to pay for any of the
specified increases and that other funds, such as additional
state General Fund, must instead be used for these purposes.
If the intent of this language is to encourage an attendant
increase in the SRR per any increases in the items listed,
rewording of this provision with added detail may be helpful.
2)This bill requires the adjustment of the SRR according to a
wide variety of factors, a number of which are not clearly
defined in order to operationalize easily. For example,
"reasonable health insurance" and "living wage" are not
defined, and are left open to interpretation. Additionally,
the type of retirement benefits required are not specified.
Furthermore, no timeframe is offered for the adjustment of the
SRR outside of "as needed." In order to offer clear direction
to the Superintendent and CDE, it may be useful to better
define terms and timelines. At the same time, it may also be
useful to specify these factors - living wage, reasonable
health insurance, and retirement benefits - as ultimate goals,
and the adjusted COLA as an important first step.
3)Requiring the SRR to be indexed to a living wage can entail
numerous complicated calculations, given that living wages are
typically responsive to regional costs (including housing
costs) and family size (including ages of children). The SRR
is a statewide rate, and it is unclear how a uniform statewide
rate would be adjusted by a regionally-responsive living wage.
Additionally, it is unclear how a change based on a living
wage, which is an hourly wage for an individual worker, would
translate into a change in the SRR, which is a per-child,
per-day amount. That is, the language in this bill doesn't
make clear if this is a percent-for-percent increase, or if
some other method may be used for adjusting the SRR per the
living wage, as well as per reasonable health insurance and
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retirement benefits.
Clarifying language may be useful to ensure this bill can help
to achieve the author's goals of rightfully elevating the wage
profile of child care workers, whose work is essential in
promoting successful outcomes for children.
REGISTERED SUPPORT / OPPOSITION:
Support
California Child Development Administrators Association (CCDAA)
Cal-SAFE Program at Redwood High School
Coalition of California Welfare Rights Organization, Inc.
Community Action Marin Child Development Program
Extended Child Care Coalition of Sonoma County
Go Kids
Professional Association for childhood Education
Quality Children's Services
The Advancement Project
5 individuals
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Opposition
None on file.
Analysis Prepared by:Daphne Hunt / HUM. S. / (916) 319-2089