BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  April 27, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2368 (Gordon) - As Amended April 5, 2016


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          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  







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            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  







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            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  







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            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,  







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               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