BILL ANALYSIS Ó
SENATE COMMITTEE ON HUMAN SERVICES
Senator McGuire, Chair
2015 - 2016 Regular
Bill No: AB 2368
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|Author: |Gordon |
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|Version: |April 5, 2016 |Hearing |June 28, 2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Taryn Smith |
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Subject: Child care and development services: individualized
county child care subsidy plan: County of Santa Clara
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 within the county.
ABSTRACT
Existing law:
1)Establishes the Child Care and Developmental 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,
including a full range of supervision, health, and support
services through full- and part-time programs. (EDC 8200, et
seq.)
2)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
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8202)
3)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 the California Department of Education (CDE), in order to
allow for maximum parental choice. (EDC 8220)
4)Establishes several programs providing subsidized child care
and development services that service low-income families who
are working, seeking work, in training, or providing community
service. These programs are administered by CDE and require
the Superintendent of Public Instruction to adopt rules and
regulations on eligibility, enrollment, family fees, provider
rates, and priority services. (EDC 8235 and 8263)
5)Establishes the San Mateo County, San Francisco, and Alameda
County individualized county child care subsidy plan pilot
projects. (EDC 8347, 8335, and 8340)
This bill:
1)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 county, as specified, to
include the following:
a) An assessment to identify the county's goal for
its subsidized child care
system, as specified.
b) A local policy to eliminate state-imposed
regulatory barriers that constrain
the county from meeting its desired outcomes for
subsidized child care, as
specified. The local policy may supersede state law
concerning child care subsidy program with regard to
family eligibility criteria; family fees;
reimbursement rates; and methods of maximizing the
efficient use of subsidy funds, as specified.
c) Recognition that all funding sources
AB 2368 (Gordon) Page 3
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utilized by direct child care and development service
contractors in the county are eligible to be included
in the county's plan.
d) Measurable outcomes to evaluate the success of
the plan in achieving
county and state child care goals, and to overcome any
barriers identified in the state's child care subsidy
system.
2)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.
3)Requires the plan to be submitted to the specified local
planning council, and upon approval to the county board of
supervisors which shall hold at least one public hearing
before voting on the plan and submitting to CDE's Early
Education and Support Division (EESD) for review provided that
board votes in its favor.
4)Requires the EESD to review and either approve or disapprove
the plan within 30 days of receiving the plan and requires
EESD to approve or disapprove any modification of the plan
within 30 days of receiving it. Specifies that the EESD 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.
5)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 Fiscal Year 2015-16.
6)Requires the county to prepare and submit an annual report
summarizing the success of the county's plan, as specified, to
the Legislature, the California Department of Social Services
(CDSS), and CDE each year.
7)Requires a participating contractor to receive any increases
or decrease in funding that the contractor would have received
had the contractor not participated in the plan.
8)Sunsets the provisions of this bill on January 1, 2022.
AB 2368 (Gordon) Page 4
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9)Makes various legislative findings and declarations related to
the unique circumstances in the County of Santa Clara that
condition a special law including the high-cost of living.
FISCAL IMPACT
According to the Assembly Appropriations Committee, this bill
would allow Santa Clara County to retain unspent child care
funds that otherwise would revert to the General Fund (GF).
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. 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. There would also be minor and absorbable costs to
the CDE to review and approve contract amendments and other
related activities.
BACKGROUND AND DISCUSSION
Purpose of the bill:
According to the author, 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 development infrastructure without
requiring additional state funding, per the author.
Families seeking quality child care are adversely affected by
the high cost of living in Santa Clara County, the author
states. The author also notes that families who earn just enough
to meet housing costs are deemed ineligible for subsidized child
care, at the same time agencies receiving insufficient state
reimbursement rates are unable to cover programing and
AB 2368 (Gordon) Page 5
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operational costs. As a result, child care subsidy funds
allocated to the county are not fully expended thereby reducing
access to quality child care, per the author. This bill seeks
to maximize state allocated funding and efficiently use child
care subsidy funds to meet local conditions, according to the
author.
Subsidized child care
Subsidized child care programs are intended to enable low-income
families to work and improve children's cognitive and
educational development. California provides child care
subsidies to low-income families that are participating in
CalWORKs as well as those that have never participated in
CalWORKs. Families generally must meet the following criteria to
be eligible for child care subsidies:
Parents musts be working or participating in an
education or training program.
A family's income must be below 70% of the state median
income, as calculated in 2007-08, which is $42,216 for a
family of three.
Children must be under the age of 13.
California offers a variety of subsidized child care and
development services that serve low-income families who are
working, seeking work, in training, or providing community
services. Families participating in CalWORKs receive subsidies
through three stages of the CalWORKs child care program.
Non-CalWORKs families participate in the AP Program, General
Child Care, or State Preschool. Across all of these programs,
the state subsidized about 436,000 low-income children in FY
2015-16
CalWORKs Child Care Program
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In order to be eligible for subsidized child care under
CalWORKs, recipients must meet certain participation criteria.
Activities that would make a CalWORKs recipient eligible for
subsidized child care include attending a county welfare
department-approved education or training program; employment;
teens who participate in Cal-Learn; or refusal of cash aid
payments in order to accept diversion services.
The purpose of this program is to help a family transition
smoothly from the immediate, short-term child care needed as the
parent starts work or work activities to the stable, long-term
child care necessary for the family to leave and remain off aid.
The CalWORKs Child Care Program is administered in three stages.
Stage 1 is administered by the county welfare departments.
Stages 2 and 3 are administered by Alternative Payment Program
(APP) agencies under contract with the CDE. APPs provide
vouchers that can be used to obtain child care in a center,
family child care home, or from a license-exempt provider.
CalWORKs families are statutorily guaranteed child care
subsidies during Stages 1 and 2 of the program.
Stage 1 begins with a family's entry into the CalWORKs
program. Clients leave Stage 1 after 6 months, or when their
situation is stable, and when there is a slot available in
Stage 2 or 3.
Stage 2 begins after 6 months or after a recipient's work or
work activity has stabilized, or when the family is
transitioning off of aid. Clients may continue to receive
child care in Stage 2 up to two years after they are no longer
eligible for aid.
Stage 3 begins when a funded space is available and when the
client has acquired the 24 months of child care, after
transitioning off of aid (for former CalWORKs recipients).
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Provider reimbursement rates
California has established two methodologies for determining the
reimbursement rates for child care and development services:
Regional Market Rates (RMR) and the Standard Reimbursement Rate
(SRR)
Regional Market Rates (RMR)
The RMR sets the maximum rate at which CDSS reimburses child
care providers that provide subsidized child care. RMR rates
are based on a survey of licensed centers and family child care
homes in areas with similar socioeconomic conditions.
Rate ceilings are established for each county according to
estimates of the 85th percentile of rates for the various types
of local child care settings. The county rate ceilings are
differentiated by the age of the child (infant, preschool,
school age), full-day or part-day care, and frequency of care
(days per week). Families may choose a child care provider that
charges a rate above the RMR, but the provider would only be
reimbursed at the RMR. The family typically would be required
to pay the difference.
The Budget Act of 2014 set the RMR based on the 2009 survey,
thereby providing a lower rate than if it had been based on the
most recent survey, which was conducted in 2014. In Santa Clara
County, the full-time daily RMR for a preschool-age child is
shown below:
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|Child Care Provider |Full Time Daily Rate | Full Time Annual |
| | | Rate |
| | | (250 days of |
| | | operation) |
|---------------------+---------------------+---------------------|
|Child Care Center | $69.77 | $17,442.50 |
|---------------------+---------------------+---------------------|
|Family Child Care | $57.88 | $14,470.00 |
|Home | | |
|---------------------+---------------------+---------------------|
|License-Exempt | $37.62 | $9,405.00 |
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|Provider | | |
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Standard Reimbursement Rate (SRR)
Title 5 child care providers who contract directly with CDE
through the General Child Care, Migrant and Handicapped Child
Care, and California State Preschool Programs are paid the
Standard Reimbursement Rate (SRR). Title 5 providers must comply
with specified standards that include teacher qualifications and
child development standards. In order to receive subsidized
child care with Title 5 programs, the family's adjusted monthly
income must be at or below 75% of the state median income,
adjusted for family size.
SRR is a specific statewide rate established in statute. The SRR
is $38.29 per child per day for full-day care, or a maximum of
$9,572 per year based on 250 days of operation.
Recent Budget Action on RMR and SRR
AB 1600, which enacts the education budget for Fiscal Year
2016-17 increases RMR and SRR rates as follows:
1)Between January 1, 2017 and June 30, 2018, establishes the
regional market rate (RMR), which is the reimbursement for
providers who accept vouchers, at the greater of: (a) the 75th
percentile of the 2014 survey; (b) 104.5 percent of the 85th
percentile of the 2009 survey, deficited by 10.11 percent; or
(c) 104.5 percent of the 85th percentile of the 2005 survey.
2)Effective, July 1, 2018, updates the RMR to the 75th
percentile of the 2014 RMR.
3)Increases the license-exempt rate for providers from 65
percent to 70 percent, effective January 1, 2017.
4)Increases the SRR by 10 percent, beginning January 1, 2017.
5)Establishes the income eligibility threshold for families to
qualify for subsidized child care at 70 percent of the state
median income of 2007.
6)Declares legislative intent to reimburse child care providers
at the 85th percentile of the most recent RMR; to update to
the most recent RMR ceiling, based on available funding; and
to increase the RMR ceilings, through the 2018-19 fiscal year,
to reflect increased costs to providers, as a result of state
minimum wage increases.
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Other county pilot programs
Alameda County, San Mateo County and San Francisco all have
individualized county child care subsidy plans that 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 child care assistance
under 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 of the state.
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.
Santa Clara County
The cost of living in Santa Clara is reported to be well above
the state median. In 2014, for a family of four in Santa Clara
County it is estimated that a family have a self-sufficiency
hourly wage of $22.61 and $95,508 annually. The median household
annual income for the county is $91,142 as compared to state
median of about $61,933 per year. To be eligible for subsidized
child care and services the state requires a family's adjusted
monthly income to be at or below 70% of the state median income
about $42,000 per year for a family of three.
Santa Clara County serves approximately 12,692 children in state
subsidized child care programs. However, according to data
provided by the county, 6,206 (68%) of the 11,633 children that
are eligible for the California State Preschool Program are not
served. For the General Child Care and Development (CCTR)
program, 71,221 children qualify, but 63,624 (88%) of the
qualified children are not served. While there is no statewide
data regarding unmet need in child care, anecdotal data from
local providers indicates that it is not uncommon to have
waitlists of over 100 children, and average wait times of 6
months or more. As a result, children and families in Santa
Clara County are unable to access quality child care in part by
the unintended consequences of living in a high-cost county.
According to data from CDSS, less than 400 CalWORKs recipients
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received child care services in Santa Clara County during the
last quarter of Fiscal Year 2014-15.
Related legislation:
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.
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), SB
1016 (Committee on Budget and Fiscal Review, Chapter 38,
Statutes of 2012) and AB 1610 (Committee on Budget, Chapter 724,
Statutes of 2010) extended the sunset dates of the San Francisco
plan.
AB 1326 (Simitian, Chapter 691, Statutes of 2003) established
the San Mateo County individualized county child care subsidy
plan pilot project
SB 701 (Migden, Chapter 725, Statutes of 2005) established the
San Francisco individualized county child care subsidy plan
pilot project.
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COMMENTS
This bill does not change funds allocated to Santa Clara County
for subsidized child care. Similar to pilot projects authorized
for other high cost of living counties, AB 2368 would allow
Santa Clara County to maximize allocated funding and to
efficiently use child care subsidy funds in order to meet local
conditions by providing the county with limited flexibility to
assess and address local conditions of working families in the
county through a child care subsidy pilot plan. Specifically,
it would allow the county to reinvest unexpended funds
appropriated for child care back into the county subsidized
child care system in a way that meets the needs of families
residing in the county. Without taking funds from other
counties, or increasing state costs, this and other similar
programs permit waivers of specific state rules: 1) family
eligibility criteria, 2) family fees, 3) reimbursement rates,
and 4) methods of maximizing the efficient use of subsidy funds.
Given that Santa Clara would be the fourth local government
operating with a similar individualized county child care
subsidy plan, 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 pursue a more global approach, it may wish to
consider the successes, responses to challenges, and the impacts
these programs have had on children, families, and providers.
PRIOR VOTES
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|Assembly Floor: |80 - |
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|Assembly Appropriations Committee: |20 - |
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|Assembly Human Services Committee: |7 - |
| |0 |
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POSITIONS
Support:
Kidango (Co-Sponsor)
Santa Clara County Office of Education (Co-sponsor)
Alameda County Board of Supervisors
Bay Area Council
California Association for the Education of Young Children
California Child Care Coordinators Association
California Head Start Association
California Young World
Campbell Union School District
Congregation Beth AM
Early Edge
Educare California at Silicon Valley
First 5 California
First 5 San Mateo
First 5 Santa Clara County
Gilroy Unified School District State Preschool
Go Kids, Inc. of Gilroy
Leagues of Women Voters in Santa Clara County
Local Early Education Planning Council of Santa Clara
County
Mountain View Wishman
San Francisco Child Care Planning and Advisory Council
San Francisco SRR Initiative
San Mateo Office of Education
Santa Clara County Board of Supervisors
Sixth District PTA
` SJB Child Development Centers
1 Individual
Oppose:
None.
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