BILL ANALYSIS Ó AB 2368 Page 1 Date of Hearing: April 27, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2368 (Gordon) - As Amended April 5, 2016 ----------------------------------------------------------------- |Policy |Human Services |Vote:|7 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill authorizes the County of Santa Clara to establish a five-year pilot program for purposes of developing and implementing an individualized county child care subsidy plan that meets the particular needs of families in the community. FISCAL EFFECT: 1)This bill would allow Santa Clara County to retain unspent child care funds that otherwise would revert to the General Fund. According to Santa Clara County's Local Early Education Planning Council, approximately $9.3 million under the Title 5 AB 2368 Page 2 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. That funding is a combination of GF, Prop 98 funding and federal funds. Historically, such reversions have been redistributed for child care purposes in subsequent budget years. 2)Minor and absorbable costs to the State Department of Education to review and approve contract amendments and other related activities. COMMENTS: 1)Purpose. 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." Like similar pilot projects before, this bill would enable Santa Clara County to maximize allocated funding and efficiently use child care subsidy funds by creating an individualized county child care subsidy plan in Santa Clara County like those used in Alameda, San Mateo and San Francisco Counties. 2)Background: 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 AB 2368 Page 3 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 for three- and four-year olds; and APPs, which provide vouchers 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. 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). In Santa Clara County, 12,692 children are served by subsidized child care programs. 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 indicate that it is not uncommon to have waitlists of over 100 children, and average wait times of six months or more. 3)Pilot Programs. The individualize county child care pilot programs in Alameda, San Mateo and San Francisco Counties were created to address issues similar to those faced by Santa Clara County today. Those counties were seeing a portion of their child care subsidy funds go unused as low-income families in these high-cost counties failed to qualify under statewide criteria, and provider reimbursement rates were insufficient to cover program costs and overhead. These pilot AB 2368 Page 4 projects, still in use today, offer limited local flexibility to revise eligibility rules and adjust provider rates to meet local needs. As a result, these counties have been able to reinvest otherwise-unused funds back into their programs. 4)Prior Legislation. a) AB 833 (Bonta), Chapter 563, Statutes of 2015, authorized Alameda County to develop and implement, as a pilot project, an individualized county child care subsidy plan. b) 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. c) The sunset date of the San Francisco plan has been extended three times as follows: AB 86 (Committee on Budget), Chapter 48, Statute s of 2013, SB 1016 (Committee on Budget and Fiscal Review), Chapter 38, Statutes of 2012, AB 1610 (Committee on Budget), Chapter 724, Statutes of 2010, d) SB 1225 (Yee), 2010, would have extended the sunset date of the San Francisco individualized county child care subsidy plan to 2016. It was held in the Senate Appropriations Committee. e) 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. f) SB 701 (Migden), Chapter 725, Statutes of 2005, AB 2368 Page 5 established the San Francisco individualized county child care subsidy plan pilot project, to sunset in 2011. g) AB 1326 (Simitian), Chapter 691, Statutes of 2003, established the San Mateo County individualized county child care subsidy plan pilot project, to sunset in 2009. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081