BILL ANALYSIS Ó
AB 833
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Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Kansen Chu, Chair
AB 833
(Bonta) - As Amended April 22, 2015
SUBJECT: Early childhood education
SUMMARY: Establishes a subsidized child care pilot program in
Alameda County.
Specifically, this bill:
1)States Legislative intent to build a stable, comprehensive,
and adequately funded high-quality early learning and
educational support system.
2)Permits Alameda County to develop and implement an
individualized county child care subsidy plan, as specified,
to include the following:
a) An assessment to identify the county's goal for its
subsidized child care system, as specified;
b) Development of a local policy to eliminate state-imposed
regulatory barriers to the county's achievement of its
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desired outcomes for subsidized child care, as specified;
c) Recognition that all funding sources utilized by direct
child care service contractors in the county are eligible
to be included in the county's plan; and
d) Establishment of measurable outcomes to evaluate the
success of the plan to achieve the county's child care
goals and to overcome any barriers identified in the
state's child care subsidy plan.
1)Requires the California Department of Education's (CDE) Child
Development Division (CDD) to review and either approve or
disapprove any modification of the plan within 30 days of
receiving it. Further specifies that CDD may only disapprove
those portions of the plan that are not in conformance with
the provisions of this bill or that are in conflict with
federal law.
2)Requires the county to prepare and submit a report summarizing
the success of the county's plan, as specified, to the
Legislature, the Department of Social Services (DSS), and CDE
each year.
3)Requires a participating contractor to receive any increase or
decrease in funding that the contractor would have received
had the contractor not participated in the plan.
4)Repeals the provisions of this bill as of January 1, 2021.
5)Declares legislative findings that a special law is necessary
and that a general law cannot be made applicable because of
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the unique circumstances in Alameda County, 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, and
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
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
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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)To allow for maximum parental choice, authorizes the operation
of Alternative Payment Programs (APPs) and provision of
alternative payments and support services to parents and child
care providers by local government agencies or non-profit
organizations that contract with CDE. (EDC 8220)
6)Establishes rules and requirements for APPs and providers, as
contracted agencies with CDE, to observe, including but not
limited to accounting and auditing requirements, attendance
monitoring requirements, referral requirements where
applicable, and reimbursement and payment procedures. (EDC
8220 et seq.)
7)Requires the Superintendent of Public Instruction to adopt
rules and regulations regarding eligibility, enrollment, and
priority of services. (EDC 8263)
8)Requires the Superintendent to adopt rules, regulations, and
guidelines to facilitate funding and reimbursement procedures
for subsidized child care. (EDC 8269)
9)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)
10)Establishes the San Mateo County and San Francisco
individualized county child care subsidy plan pilot projects
and provides for them to sunset in 2016 and 2018,
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respectively. (EDC 8347 and 8335)
FISCAL EFFECT: Unknown
COMMENTS:
Subsidized child care: Subsidized child care may be available
to low-income families through a number of programs.
Additionally, California offers State Preschool Programs to
eligible three-and four-year-olds.
California offers subsidized child care to parents participating
in CalWORKs and to families transitioning off of and no longer
receiving aid. This child care is offered in three "stages";
DSS administers Stage 1, and CDE administers Stages 2 and 3.
CDE also administers non-CalWORKs child care. The largest
programs are: General Child Care, which includes contracted
centers and family child care homes; the California State
Preschool Program, which includes contracted centers and family
child care homes for three- and four-year olds; and APPs, which
provide vouchers that can be used to obtain child care in a
center, family child care home, or from a license-exempt
provider. Waitlists for non-CalWORKs child care are common.
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. The current SRR
is $36.10 per child for a full day of care. 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.
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The Regional Market Rate survey calculates the market rates for
child care in each of California's 58 counties and uses these to
establish maximum child care reimbursement rates for child care
services for families in various APP or other voucher child care
programs. States are required to conduct a market rate survey
every two years, but are not required to use the most recent
survey to set rates. Reimbursement rates for licensed providers
accepting vouchers are currently set at the 85th percentile of
the 2009 RMR survey less 10.11%. License-exempt providers are
reimbursed at 60% of the Family Child Care Home ceilings. In
Santa Clara County, for example, the full-time daily RMR for a
preschool-age child in a child care center is $66.77. For that
same child in a family child care home, the RMR is $55.39, and
with a license-exempt provider, the RMR is $33.23.
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).
Across the various subsidized child care programs, there are
estimated to be over 205,000 slots (not including State
Preschool). State Preschool contains close to 150,000
additional slots.
Child care in Alameda County: 14,206 children are served by
subsidized child care programs in Alameda County (note that
these data do not include the number of children in CalWORKs
Stage 1 child care). The following shows enrollment across
programs (there is some duplication and therefore, these numbers
total to more than 14,206):
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Alternative Payment Programs:1,270
CalWORKs Stage 2: 1,722
CalWORKs Stage 3: 1,778
General Child Care: 2,507
For children with severe disabilities: 73
State Preschool: 7,763
While Alameda County does not have a centralized eligibility
list that provides an exact number of children wait-listed for
subsidized child care, the Alameda County Early Care and
Education Planning Council has polled a number of providers in
the county and found that there are over 9,750 children on their
waitlists. This indicates that there are likely well over
10,000 children in the county who are eligible for, but unable
to access slots in, local subsidized child care programs.
An evaluation of the San Francisco pilot program found that,
during the period of 2011-12 to 2013-14, Alameda County lost 22%
of its subsidized child care contractors. (The San Francisco
pilot, by comparison, lost 10%.)
San Mateo County and San Francisco pilot programs: AB 1326
(Simitian), Chapter 691, Statutes of 2003, established the San
Mateo County individualized county child care subsidy plan pilot
project and SB 701 (Migden), Chapter 725, Statutes of 2005,
established the San Francisco individualized county child care
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subsidy plan pilot project. Both pilots were developed to
address two significant issues facing subsidized child care in
high-cost counties: 1) that low-income families earning just
enough to afford housing in a high-cost area may be deemed to
earn too much to qualify for assistance with child care by
statewide eligibility standards, and 2) that the statewide SRR
paid to contracted child care centers and family child care
homes is often not sufficient to cover program costs and
overhead, particularly in high-cost areas. Both counties would
see a portion of their child care subsidy funds go unused as
low-income families failed to qualify for eligibility by uniform
statewide criteria, and as provider reimbursement rates made
offering subsidized care untenable for some providers.
San Mateo County's and San Francisco's pilot programs, still in
operation today, offer them the limited local flexibility to
revise eligibility rules and adjust provider rates and family
fees within the context of local evaluation and assessment and
heightened state oversight. Thus, the counties are able to
reinvest otherwise-unused funds through increased reimbursement
rates. A December 2014 memo regarding the San Francisco pilot
stated that, "In June 2014, Governor Jerry Brown signed the
Budget Act of 2014 that included an increase in the SRR from
$34.38 to $36.10 per day beginning on July 2014. Accordingly,
the SRR Pilot in San Francisco increased from $36.63 to $38.46
per day. Despite this increase, the SRR is far below the San
Francisco market (e.g., $76.76 per day for preschool)."
Both San Mateo County and San Francisco are also allowed
flexibility regarding eligibility rules. San Mateo County and
San Francisco currently set their eligibility income thresholds
at 80% of the current State Median Income, compared to 70% as
the state does.
Evaluation of the pilot programs: In its most recent annual
report, which is for 2012-13, San Mateo County reports that
"Overall, we see that San Mateo's pilot project has shown
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success in meeting several of the goals presented in the pilot
plan." These include:
a)Increasing the retention of center-based child care and
development services contractors;
b)Increasing the aggregate child days of enrollment in
subsidized child care;
c)Increasing the ability of low-income families to move toward
self-sufficiency through higher earnings;
d)Increasing the stability of child care placements for children
whose families would otherwise become income-ineligible for
child care subsidies; and
e)Maximizing the take-up of San Mateo County's child care and
child development subsidy allocations: San Mateo County
reports that the share of funds returned to the state has
fallen from 15% in 2002-03 to 2% in 2012-13.
San Francisco has met with a few more challenges in the
implementation of its pilot. Some of this difficulty may be
attributed to the fact the San Francisco's pilot initially
mirrored that of San Mateo County, and thus was not designed to
address the unique challenges facing San Francisco's subsidized
child care system. In the first six years of the pilot, San
Francisco saw its contract earnings decrease, rather than
increase, from 98% to 93%.
Consequently, San Francisco and CDE conducted a review of the
pilot program and made adjustments for fiscal year 2011-12,
implementing a "Pilot 2.0," which included a number of revised
elements. An evaluation of results from the first three years
of Pilot 2.0 (2011-12 through 2013-14) found the following:
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a)San Francisco has lost the smallest share of subsidized child
care contractors compared to neighboring counties;
b)Pilot 2.0 has served almost 1,200 children who would otherwise
not be eligible for subsidized child care because their
families increased their earnings into a range above what is
eligible in other counties;
c)Pilot 2.0 returned less than 5% of contract dollars each year
from 2011-12 through 2013-14, compared to between 6% and 8% in
the three previous years;
d)Pilot 2.0 has achieved, on average, a 3% increase in child
days of enrollment; and
e)Since the beginning of San Francisco's first pilot program in
2005, it has continued to serve an increasing share of the
neediest children (those whose families earn incomes below 50%
of the State Median Income).
Need for this legislation: With close to 10,000 children
waitlisted for subsidized child care, and difficulties retaining
contractors, Alameda County may be a good candidate for an
individualized county child care subsidy plan like those seen in
San Mateo County and San Francisco.
According to the author:
"In Alameda County, many children and families are unable to
access quality child care in part by the unintended
consequences of living in a high cost county. Since many
families are deemed ineligible due to the high cost of living
and provider reimbursement rates are insufficient to cover the
cost of care, child care subsidy funds allocated to Alameda
County are not fully expended.
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[This bill] provides Alameda County limited local flexibility
with increased state oversight to address the fiscal reality
of high-cost counties, where the cost of living and doing
business is well beyond the state median. With the ability 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, Alameda County will be able to maximize
allocated funding and efficiently use child care subsidy funds
to meet local conditions. As a result, more children can be
served with quality child care."
Staff comments: The results from the San Mateo County pilot and
the San Francisco Pilot 2.0 are encouraging and may point the
way towards more comprehensive reform of subsidized child care
throughout the state. While the adoption of a third pilot
program for Alameda County may indeed be warranted, there are a
number of other high-cost counties in the state that also face
similar situations. In coming years, the state may wish to
consider a more comprehensive approach to addressing the
subsidized child care needs of high-cost areas.
Furthermore, the experience of San Francisco highlights the role
that responsiveness to unique local needs and continuous
assessment and refinement can play in adjusting and improving
pilot program performance to meet the needs of children and
families. Information-sharing among the counties with pilots,
and comprehensive data collection and analysis, may help to
further each of those counties' programs, as well provide
valuable information for any larger statewide initiatives to
follow.
PRIOR LEGISLATION:
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AB 260 (Gordon), Chapter 731, Statutes of 2013, extended the
sunset dates of the San Francisco and San Mateo County
individualized county child care subsidy plans to 2016 and 2018,
respectively.
AB 86 (Committee on Budget), Chapter 48, Statutes of 2013,
extended the sunset data of the San Francisco individualized
county child care subsidy plan to 2015.
SB 1016 (Committee on Budget and Fiscal Review), Chapter 38,
Statutes of 2012, extended the sunset date of the San Francisco
individualized county child care subsidy plan to 2014.
AB 1610 (Committee on Budget), Chapter 724, Statutes of 2010,
extended the sunset date of the San Francisco individualized
county child care subsidy plan to 2013.
SB 1225 (Yee), 2010, would have extended the sunset date of the
San Francisco individualized county child care subsidy plan to
2016. It died in the Senate Appropriations Committee.
AB 1304 (Simitian), Chapter 61, Statutes of 2008, extended the
sunset data of the San Mateo County individualized county child
care subsidy plan to 2014.
SB 701 (Migden), Chapter 725, Statutes of 2005, established the
San Francisco individualized county child care subsidy plan
pilot project, to sunset in 2011.
AB 1326 (Simitian), Chapter 691, Statutes of 2003, established
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the San Mateo County individualized county child care subsidy
plan pilot project, to sunset in 2009.
REGISTERED SUPPORT / OPPOSITION:
Support
Alameda County Board of Supervisors
BANANAS
Bay Area Council
Davis Street
Early Edge California
Ephesian children's Center
First Five Alameda County
The Unity Council Head Start/Early Head Start Programs
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Via Nova Children's School
Opposition
None on file.
Analysis Prepared by:Daphne Hunt / HUM. S. / (916) 319-2089