BILL ANALYSIS Ó
AB 2368
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Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Susan Bonilla, Chair
AB 2368
(Gordon) - As Amended April 5, 2016
SUBJECT: Child care and development services: individualized
county child care subsidy plan: County of Santa Clara
SUMMARY: Establishes a subsidized child care pilot program in
Santa Clara 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 Santa Clara 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 goals for its
subsidized child care system, as specified;
b) Development of a local policy to eliminate state-imposed
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regulatory barriers to the county's achievement of its
desired outcomes for subsidized child care, as specified;
c) Recognition that all funding sources utilized by direct
child care service contractors in the county and
contractors that contract with licensed providers and
centers 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)States that the plan, and requirements regarding it, shall not
be construed to permit the county to change the regional
market rate survey results for the county.
2)Requires the plan to be submitted to the local planning
council, as specified, for approval and, upon approval,
requires the Santa Clara County Board of Supervisors to hold
at least one public hearing on the plan. Requires the plan,
should the board vote in favor of it after this hearing, to be
submitted to the California Department of Education's (CDE's)
Early Education and Support Division to review the plan and,
within 30 days of receiving it, to approve or disapprove it.
3)Requires the Early Education and Support Division to review
and either approve or deny any modification of the plan within
30 days of receiving it. Further specifies that the Early
Education and Support Division may only deny those portions of
the plan that are not in conformance with the provisions of
this bill or that are in conflict with federal law.
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4)Requires the county, by the end of the first fiscal year of
operation under the approved child care subsidy plan, to
demonstrate an increase in the aggregate days a child is
enrolled in child care as compared to the enrollment in the
final quarter of the 2015-16 Fiscal Year.
5)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.
6)Requires a participating contractor to receive an increase or
decrease in funding that the contractor would have received
had the contractor not participated in the plan.
7)Repeals the provisions of this bill as of January 1, 2022.
8)Declares legislative findings that a special law is necessary
and that a general law cannot be made applicable because of
the unique circumstances in Santa Clara 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.)
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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
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
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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, San Francisco, and Alameda
County individualized county child care subsidy plan pilot
projects. (EDC 8347, 8335, and 8340)
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.
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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 $38.29 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.
The Regional Market Rate (RMR) 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 derived by
applying a formula to the 2009 RMR. License-exempt providers
are reimbursed at 65% 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 $69.77. For
that same child in a family child care home, the RMR is $57.88,
and with a license-exempt provider, the RMR is $37.62.
Families are typically eligible for subsidized child care if
their income is less than 70% of the 2007-08 State Median Income
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(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 195,000 slots (not including State
Preschool). State Preschool contains over 157,000 additional
slots.
Child care in Santa Clara County: 12,692 children are served by
subsidized child care programs in Santa Clara County. The
following shows enrollment across programs:
State Preschool: 4,308
CalWORKs Stage 1: 732
CalWORKs Stage 2: 4,016
CalWORKs Stage 3: 1,142
Center-Based Care: 1,351
Alternative Payment Programs: 790
Family Child Care Network: 250
Early Head Start: 84
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Migrant Child Care: 15
Santa Clara County does not have a centralized eligibility list
that provides an exact number of children wait-listed for
subsidized child care. However, anecdotal data from providers
indicates that it is not uncommon to have waitlists of over 100
children, and average wait times of 6 months or more.
Other county 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 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. Both San Mateo County and San Francisco are also allowed
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flexibility regarding eligibility rules. San Mateo County and
San Francisco currently set their income eligibility exit
thresholds at 85% of the current State Median Income, compared
to 70% as the state does.
Both the San Mateo County and San Francisco pilot programs have
shown success in meeting several of their identified goals;
while San Francisco's pilot initially met with some challenges,
it was reviewed and adjusted, and "Pilot 2.0" has also shown
success in meeting goals.
Alameda County recently adopted its own individualized county
child care subsidy plan pilot project last year, with the
passage of AB 833 (Bonta), Chapter 563, Statutes of 2015.
Need for this legislation: According to the author:
"Santa Clara County serves approximately 12,600 children in
state subsidized child care programs. Unfortunately, the
fiscal reality of living in a high-cost county means that many
families are deemed ineligible for subsidized child care and
that provider reimbursement rates are insufficient to cover
the cost, as a result, child care subsidy funds allocated to
Santa Clara County are not fully utilized or expended. In
fact, according to Santa Clara County's Local Early Education
Planning Council, approximately $9.3 million under the Title 5
state subsidized child care contracts has been returned to the
state. This roughly translates to 1,100 children who could
have been served in the county.
Like similar pilot projects before, [this bill] would give
Santa Clara County limited local flexibility to maximize
allocated funding and efficiently use child care subsidy funds
in order to meet local conditions. [This bill] would allow
child care providers to better meet the needs of children and
working families, improve access to state subsidized child
care programs, and strengthen the fragile child care and
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development infrastructure without requiring additional state
funding."
Staff comments: The situation facing the counties that adopted
individualized county subsidized child care pilot programs is
one facing Santa Clara County: the need for higher child care
rates and for eligibility rules that recognize that, by the time
a family is able to afford a modest living in a high-cost area
of the state, it may very well be making too much to qualify for
subsidized child care. This pilot program could serve to
greatly benefit a number of families in Santa Clara County.
At some point, however, the state may wish to consider a more
comprehensive approach to addressing the subsidized child care
needs of high-cost and medium-to-high-cost areas in California.
Should the state take this more global approach, it may also
wish to look to these pilot programs - their successes and
responses to challenges, and the impacts they have had on
children, families, and providers - to help inform any changes
it may pursue.
REGISTERED SUPPORT / OPPOSITION:
Support
Bay Area Council
California Child Care Coordinator's Association
California Head Start Association
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Campbell Union School District
Child Development Incorporated
Community Child Care Council of Santa Clara County, Inc.
Congregation Beth Am
Early Edge California
Educare California at Silicon Valley
Family Child Education, Santa Clara Unified School District
First 5 San Mateo County
First 5 Santa Clara County
Gilroy Unified School District State Preschool
Go Kids
Kidango -co-sponsor
Mandala Children's House
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Milpitas Unified School District's Child Development Centers
MountainView Whisman
San Francisco SRR Initiative
San Mateo County Office of Education
Santa Clara County Board of Supervisors
Santa Clara County Office of Education - co-sponsor
Sixth District PTA
SJB Child Development Centers
1 individual
Opposition
None on file.
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Analysis Prepared by:Daphne Hunt / HUM. S. / (916) 319-2089