BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2150 (Santiago) - Subsidized child care and development
services: eligibility periods
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|Version: June 1, 2016 |Policy Vote: ED. 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Jillian Kissee |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: This bill makes changes to eligibility determination
and re-determination requirements for subsidized child care to
promote continuity of services for no less than 12 months.
Fiscal
Impact:
Unknown, but costs potentially in the low tens of millions
General Fund annually for CalWORKS Stage 2 and Stage 3, an
entitlement program, to provide eligibility for services for
12 months, despite changes in family circumstances, due to
less program attrition. (General Fund)
Significant increase in cost pressure for capped child care
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programs. Providing guaranteed eligibility for 12 months
results in longer waitlists for programs that have a capped
number of slots due to children remaining in programs despite
changes in income or need that would have otherwise caused
them to become ineligible, thus freeing up a slot for a
waiting family. This bill further reduces program attrition
in out years by increasing the ongoing income eligibility
threshold. It also allows more families to qualify for
services by updating the initial income eligibility threshold,
thereby adding families to existing waitlists.
One-time cost to the California Department of Education (CDE)
to develop regulations to implement this bill, estimated to be
$147,000 over an 18 month timeline. (General Fund)
State and local administrative workload could be reduced due
to less paperwork related to reporting changes that affect
eligibility. The magnitude of this effect is unquantifiable.
Background: Current law 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. Children are
eligible for subsidized child care if the family currently
receives aid, meets specified income eligibility requirements,
is homeless, or if the child is the recipient of protective
services, or has been identified as being, or at risk of being,
neglected, abused or exploited.
To be income eligible for subsidized child care and services the
state requires a family's adjusted monthly income to be at or
below 70 percent of the state median income, about $42,000 per
year for a family of three. For the 2016-17 fiscal year, the
income eligibility limits are based on what was in use for the
2007-08 fiscal year, adjusted for family size. Families are
required to report changes in circumstances, including changes
in income and employment status, throughout their child's
enrollment that could disqualify a child from the program.
The federal Child Care and Development Block Grant (CCDBG) Act
of 1990 was reauthorized in 2014. This reauthorization brought
about a number of changes aimed at addressing health and safety
requirements, quality of care, and consumer and provider
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education. Among the changes adopted, the reauthorization
establishes a 12-month eligibility redetermination period for
families, regardless of changes in income (provided income does
not exceed 85 percent of state median income), or temporary
changes in participation in work, training, or education
activities.
State regulations require families to notify their child care
contractor within five days of any changes in family income,
family size, or the need for services. Families receiving
services because the child is at risk of, or has experienced
actual, abuse, neglect or exploitation are recertified at once
every six months. All other families are recertified at least
once each contract period and at intervals not to exceed 12
months. There is some debate as to whether California's current
eligibility provisions will meet the new federal requirement.
According to the author's office, this bill seeks to provide
stability to families and ensure that California is incompliance
with the federal CCDBG Act which specifies the minimum period of
eligibility to be 12 months for each child who receives
assistance.
Proposed Law:
This bill changes eligibility with regard to the minimum
duration of services and income eligibility to qualify for
services.
12-month Eligibility
Specifically, this bill requires, upon establishing initial
eligibility or ongoing eligibility for services for child care
services, a family to be considered to meet eligibility for
services for not less than 12 months. Except as specified, this
bill provides that re-determination of eligibility must not
occur before the 12 months of services are provided and a family
is not required to report changes to income or other changes
that affect eligibility during that time. However, a family
must report increases in income that exceed the threshold for
"ongoing income eligibility" as defined below, and the family's
ongoing eligibility for services must then be re-determined.
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A family that establishes eligibility for services on the basis
of seeking employment receives services as follows:
If seeking employment is the basis for initial eligibility,
the family receives services for at least six months.
If seeking employment is the only basis for ongoing
eligibility at the time of redetermination, the family
receives services for an additional six months unless the
family becomes eligible on another basis.
This bill authorizes a family to voluntarily report income or
other changes which would be used to reduce a family's fees,
increase the family's subsidy, or extend the period of the
family's eligibility before redetermination.
This bill requires the CDE to initiate a rulemaking action to
implement these requirements by December 31, 2017. The CDE must
beforehand, convene a workgroup of parents, advocates,
department staff, child development program representatives, and
other stakeholders to develop recommendations regarding
implementation.
State Median Income
This bill also changes the criteria for establishing income
eligibility for purposes of qualifying for child care services.
With regard to income eligibility, this bill provides that for
purposes of establishing initial income eligibility for
services, "income eligible" means that a family's adjusted
monthly income is at or below 70 percent of the state median
income, based on the most recent data on state median income
published by the United States Census Bureau, for a family of
the same size.
This bill creates a new threshold for establishing "ongoing
income eligibility." For purposes of establishing ongoing
income eligibility a family's adjusted monthly income is at or
AB 2150 (Santiago) Page 4 of
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below the 85 percent of the state median income, based on the
most recent data on state median income published by the United
States Census Bureau, for a family of the same size.
Related Legislation: SB 567 (Liu, 2015) would have required a
child who is enrolled in a state or federally funded child care
program to be deemed eligible for that program for the remainder
of the program year. SB 567 failed passage in this committee.
Staff
Comments: This bill creates unknown but potential costs of up to
about $30 million to CalWORKS Stage 2 and 3 to require continued
12 month eligibility for families that would have otherwise
become ineligible due to exceeding the income threshold. This
generally assumes an attrition rate of about 4 percent to Stage
2 and Stage 3 caseload and assumes that, based on total amounts
appropriated and the caseload being served, the annual cost of
care averages about $8,500. Exact costs attributed to this
benefit are ultimately unknown because, though the state tracks
the number of children leaving care each month, there is no way
to know if the same child reenrolled in the same or another
program in the same year. The state also does not track the
reason a child leaves care, including those whose families have
left due to no longer meeting the income eligibility. Reasons
for leaving care extend beyond changes in eligibility.
This bill also expands eligibility by increasing the income
ceiling. For the first year of services, the threshold remains
at the existing 70 percent of the state median income, but based
on updated data by which eligibility is determined. For the
2016-17 fiscal year, the income eligibility limits are set at 70
percent of the state median income that was in use for the
2007-08 fiscal year, adjusted for family size. This bill uses
the most recent data on state median income published by the
United States Census Bureau, which likely has the effect of
higher incomes qualifying.
In addition, this bill establishes an ongoing eligibility limit
of 85 percent of the state median income. This has the effect
of more children staying in services for longer as they would
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have otherwise become ineligible once the family's income
exceeds 70 percent. Conceivably, a family's income could
consistently reside between 70 and 85 percent of the state
median income and not lose services, thereby further decreasing
program attrition and reducing the number of slots that become
available for the lowest income families.
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