BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: SCR 44
AUTHOR: Corbett
INTRODUCED: May 6, 2009
FISCAL COMM: Yes HEARING DATE: July 1, 2009
URGENCY: No CONSULTANT: Lynn Lorber
SUBJECT : Child Care
SUMMARY
This concurrent resolution requests the California
Department of Education to review the regional market rate
methodology and implementation guidelines that set
reimbursement rates for certain child care providers.
BACKGROUND
Currently, the state subsidizes child care through two main
categories of providers:
1) Title 22 (Alternative Payment Programs/vouchers)
licensed and licensed-exempt general child care
providers. Licensed providers are reimbursed up to a
maximum ceiling of the 85th percentile of the rates
charged by private providers in the area offering the
same type of child care (the 85th percentile of the
2005 Regional Market Rate survey). License-exempt
care providers are generally reimbursed up to 90% of
the maximum rate (85th percentile) received by
licensed providers. This formula is an attempt to
ensure that low-income families can receive similar
levels of child care service as higher-income families
in the same region.
2) Title 5 providers contract directly with the
California Department of Education for licensed child
care and preschool. These providers are reimbursed
with the Standard Reimbursement Rate, $34.38 per full
day of enrollment ($716.25 per month).
This resolution only affects Title 22 programs.
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The California Department of Education conducts a biennial
market rate survey to determine the market rate ceilings
for each county by center and licensed family child care
home.
The Governor proposed a reduction in the reimbursement rate
ceiling, from the 85th percentile of the 2005 Regional
Market Rates to the 75th percentile of the 2007 Regional
Market Rate, for a savings of $38.7 million (Proposition
98). This proposal was rejected by the Budget Conference
Committee.
ANALYSIS
This concurrent resolution requests the California
Department of Education (CDE) to review the regional market
rate methodology and implementation guidelines.
Specifically, this concurrent resolution:
1) Requests the CDE to review the current regional market
rate methodology and implementation guidelines, and
question whether adherence to the current regional
market rate system has resulted in sufficient access
for working poor families.
2) Requests that the CDE operate an open and transparent
process where all vested stakeholders are fully versed
in the methodology used for the regional market rate
survey and are included in the planning and
implementation process being undertaken by the CDE to
establish new rates or a new rate structure.
STAFF COMMENTS
1) What is the current methodology ? According to 2007
regional market rate survey, the methodology used in
this survey involved sampling and estimation that was
based first on statistical socio-economic modeling of
zip codes into "market profiles." Licensed providers
were then sampled based on the zip code of their
physical location. Reimbursement ceilings were then
calculated at the market profile level for care
setting, age of the child, and time category (hourly,
daily, weekly, monthly). County and sub-county
estimates become the weighted averages of the market
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profiles within their jurisdictions. This survey
relied heavily on the Community Care Licensing
database as a source of provider information.
2) What's the problem ? Many child care providers who are
reimbursed using the regional market rate believe that
the current survey methodology relies too heavily on
median home values and incomes, which may not
necessarily have any effect on private child care
rates charged in that area.
3) Report back . This resolution requests the California
Department of Education (CDE) to review the current
regional market rate methodology but does not provide
for a report back to the Legislature. Staff
recommends an amendment to require the CDE, should it
complete this review, to submit a report to the
Legislature before the next budget cycle about the
review and any recommended changes to the methodology.
SUPPORT
California Alternative Payment Program Association
County Welfare Directors Association of California
Community Resources for Children
Davis Street Family Resource Center
Siskiyou Child Care Council
Valley Oak Children's Services
YMCA Childcare Resource Service
OPPOSITION
None received.