BILL ANALYSIS Ó
AB 765
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Date of Hearing: May 27, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
765 (Ridley-Thomas) - As Amended March 26, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill raises the standard reimbursement rate (SSR) for
subsidized child care as necessary to provide a living wage and
specified benefits, and redefines "cost-of-living adjustment"
for purposes of this bill. Specifically, this bill:
AB 765
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1)Requires the SRR to be raised as needed to provide a living
wage, reasonable health insurance, 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.
2)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.
FISCAL EFFECT:
1)Living wage calculations will vary by county, but CDE
estimates that every 1% increase in the SSR equates to
additional costs of $11.5 million (GF).
2)Minor and absorbable costs to CDE to revise contracts and to
issue guidance documents.
COMMENTS:
1)Purpose. 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
adjustments equal to the inflation adjustments given to K-12
AB 765
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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 SSR."
2)SSR. CDE-administered subsidized child care can be provided
through contracted providers which are funded through the
receipt of the 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 for a number of years, leaving the SSR 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 now $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.
3)Living wage. A "living wage" often refers 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. Living wage estimates tend to vary
by family size, given the differing child care needs
associated with the number and ages of children.
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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 2014 hourly living wages per this standard for
one adult with two preschool-age children, ranged from $29 per
hour in Riverside County to $40 per hour in Santa Clara
County.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081