BILL ANALYSIS
SCR 47
Page 1
Date of Hearing: September 1, 2009
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
SCR 47 (DeSaulnier) - As Introduced: May 14, 2009
SENATE VOTE : 24-11
SUBJECT : Child Development Centers and Preschool: Funding
SUMMARY : States the intent of the Legislature to increase the
funding of child development centers and preschools in future
years, as resources become available, in order to provide staff
of Title 5 child development centers and preschools with
adequate salaries and benefits, provide adequate resources to
support program quality for children, and keep programs open to
serve parents and children. Specifically, this bill :
1)Makes findings as follows:
a) Child development centers and preschools that contract
with the California Department of Education (CDE) must
comply with Title 5 of the California Code of Regulations,
which establishes program quality and personnel standards;
b) Title 5 Child development centers and preschools have
demonstrated outcomes in preparing children for success in
school through evaluation by the Desired Results system;
c) Child care centers, family child care homes, and
license-exempt in-home providers who are not required to
meet Title 5 education standards are reimbursed at rates up
to 60% higher; and,
d) Due to the inadequate standardized reimbursement rate
Title 5 child care center and preschools receive, these
programs are at risk of closure.
2)Resolves that the Legislature recognizes the value and
contribution of Title 5 child development centers and
preschools, the serious inequity in the fiscal support of
these programs, and that the Legislature intends to increase
its funding in future years, as resources become available.
EXISTING LAW:
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1)Establishes a system of child care and development services
for children up to 13 years of age and provides certain
requirements for the payment by the state for these child care
and development services.
2)Requires the Superintendent of Public Instruction (SPI) to
implement a plan that establishes reasonable standards and
assigned reimbursement rates, which vary with the length of
the program year and the hours of service.
3)Requires the standard reimbursement rate (SRR) to be $3,523
per unit of average daily enrollment for a 250-day year,
increased by a cost-of-living adjustment granted by the
Legislature beginning July 1, 1980.
4)Requires the SPI to adopt rules, regulations and guidelines to
facilitate the funding and reimbursement procedures required
by law.
FISCAL EFFECT : According to the Legislative Counsel, this bill
is nonfiscal.
COMMENTS : Background . The CDE administers a child care and
development system, maintaining over 1,500 service contracts
with approximately 786 public and private agencies supporting
and providing services to about 500,000 children from birth to
13 years of age. Contractors include school districts, county
offices of education, cities, colleges, other public entities,
community-based organizations, and private agencies.
In Fiscal Year (FY) 2009-10, child care and development programs
received almost $3.1 billion in state and federal funds, of
which, according to the Legislative Analyst's Office (LAO),
approximately 83% goes to child care, 14% to preschool programs,
and 3% for related support activities. The Governor, in his May
Revision of the FY 2010-11 budget, has proposed to eliminate the
California Work Opportunity and Responsibility to Kids
(CalWORKs) program and state funds for subsidized child care,
with the exception of the state preschool program.
According to the LAO, child care programs are designed primarily
to supervise children while child development programs have a
focus on early childhood education. However, many programs have
dual functions. Families receiving CalWORKs services and
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non-CalWORKs families below 75% of state median income ($50,256
for a family of four) are eligible for subsidized child care
services. According to the LAO, 70% of recipients receive
vouchers that enable them to choose a licensed center, licensed
family child care homes, or license-exempt care (e.g., care by a
relative). The voucher program is administered by Alternative
Payment Programs (APPs) selected by the CDE. Child care
licensed providers must comply with Title 22 regulations
developed by the California Department of Social Services and
receive reimbursements of up to 85th percentile of child care
rates charged by private providers in the area.
The rates are determined by the Regional Market Rate (RMR)
survey and vary depending on the geographical location of the
provider. According to the CDE, the RMR is a survey of licensed
centers and family child care homes based on measurements of
child care rates of similar socioeconomic conditions, rather
than geographic proximity, creating ''price profiles" of similar
zip codes. Ceilings are established for each county according
to estimates of the 85th percentile of child care rates for
groups of centers and family child care homes. These county
market rate ceilings are differentiated by the age of the child,
full-time or part-time care, and frequency of care. The rate is
intended to enable access to 85% of all licensed providers in a
county. State and federal law requires the survey to be updated
every two years. However, due to budgetary reasons, the current
RMR is still based on the 2005 survey.
Child development programs and preschools that contract directly
with CDE must comply with Title 5 regulations developed by the
CDE and receive the SRR with increased adjustments for infants
or special needs. The current SRR, which was last adjusted in
2007-08, is $34.38 per day for full-day care (or $8,595
annually) and $21.22 per day per child for preschool (or $3,714
annually).
There are two resolutions before the Committee that address
child care and early childhood development program provider
payments. This resolution is sponsored by the California Child
Development Administrators Association and addresses the SRR.
SCR 44 (Corbett) is sponsored by the California Alternative
Payment Program Association and addresses the RMR.
According to the author, "The current reimbursement structure
creates an incentive for providing the lowest quality care to
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California's children. In 80 percent of California, child care
centers, family child care homes, and license-exempt in-home
providers who are not required to meet high quality education
standards are reimbursed at a rate 60 percent higher than Title
5 child development centers and preschools. Title 5 child
development centers and preschool programs are at risk of
closure due to the large gap between the current standard
reimbursement rate and the real cost of doing business."
The author cites, as an example, that Title 22 licensing
requires providers to meet minimal health and safety standards
and have some college-level education while Title 5 providers
must have a Child Development Teacher Permit issued by the
Commission on Teacher Credentialing. Yet, according to the
author, in high cost areas, a licensed exempt provider receives
$807, licensed family care home provider receives $913 and a
licensed center provider receives $917 per day, while a Title 5
provider receives $716 per day.
According to the LAO, approximately half of the counties in the
state have RMRs that are higher than the SRR while half are
below the SRR. However, while the difference in lower cost
areas where RMRs (Title 22 providers) are below the SRR (Title 5
providers) is approximately one to two dollars per child per
hour, the gap in higher cost areas between the RMR and SRR is
between $12 to $15 per hour per child.
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|County |Maximum Regional |Standard |
| |Market Rate |Reimbursement Rate |
|---------------------+---------------------+---------------------|
|Colusa, Lassen, | Between 32.53 and | 34.38 |
|Mariposa, Merced, | 34.38 | |
|Modoc, Plumas, | | |
|Sierra, Sutter, | | |
|Tehama, Trinity, | | |
|Shasta, Inyo, | | |
|Siskiyou, Madera, | | |
|Tulare, Del Norte, | | |
|Imperial, Glenn, | | |
|Amador, Butte, Lake, | | |
|Tuolumne, Kings, | | |
|Stanislaus, | | |
|Mendocino | | |
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|---------------------+---------------------+---------------------|
|Kern, Fresno, | Between 34.65 - | 34.38 |
|Humboldt, Calaveras, | 34.88 | |
|Alpine | | |
|---------------------+---------------------+---------------------|
|San Bernardino, San | Between 35.01 - | 34.38 |
|Joaquin, Riverside, | 35.65 | |
|Sacramento, Nevada | | |
|---------------------+---------------------+---------------------|
|El Dorado, Yolo, San | Between 36.31 - | 34.38 |
|Luis Obispo, Santa | 37.52 | |
|Barbara, Los | | |
|Angeles, San Diego | | |
|---------------------+---------------------+---------------------|
|Solano, Placer, | Between 38.12 - | 34.38 |
|Monterey | 38.45 | |
|---------------------+---------------------+---------------------|
|Napa, Mono, Sonoma | Between 39.11 - | 34.38 |
| | 39.88 | |
|---------------------+---------------------+---------------------|
|Ventura, San Benito, | Between 40.20 - | 34.38 |
|Orange | 40.77 | |
|---------------------+---------------------+---------------------|
|Santa Cruz, Contra | Between 41.31 - | 34.38 |
|Costa | 41.33 | |
|---------------------+---------------------+---------------------|
|Alameda | 42.38 | 34.38 |
|---------------------+---------------------+---------------------|
|San Mateo, Santa | Between 46.35 - | 34.38 |
|Clara | 46.91 | |
|---------------------+---------------------+---------------------|
|San Francisco | 47.32 | 34.38 |
|---------------------+---------------------+---------------------|
|Marin | 53.83 |34.38 |
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This resolution asks the Legislature to recognize the inequity
in payment between Title 22 and Title 5 providers and expresses
the Legislature's intent to increase funding for Title 5
providers. However, the inequity is only found in higher cost
areas. In low cost areas, Title 5 providers receive a higher
rate than Title 22 providers.
The LAO recommends eliminating both rate structures to recreate
a blended structure that accounts for quality of all programs
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and geographical cost differences. The LAO recommends providing
higher reimbursement rates for higher quality care while
recognizing regional cost differences. The LAO argues that this
approach will reward higher quality providers, provide stronger
incentives for all providers to improve quality, and link
reimbursement rates to actual costs.
Even though this resolution is nonbinding on future legislative
actions, should the Legislature express intent to increase
funding for one program and one type of provider? Should the
Legislature instead express support to re-review the RMR and SRR
to address rate inequity where there are inequities and create
incentives to improve quality?
The difference in rates notwithstanding, early childhood
development program staff plays an important role in preparing
kids for kindergarten and beyond. Yet, there is high staff
turnover, attributable in part to inadequate pay. According to
the United States Bureau of Labor Statistics, the median hourly
wage of child care workers in 2009 was $9.25. Improving quality
of care, ensuring that programs are sustainable, and providing
access to the 200,000 children waiting for state subsidized care
require increased resources.
Arguments in Support . The Child Development Policy Institute
states, "?the Regional Market Rate (RMR), which is adjusted
approximately every two years, exceeds the Standard
Reimbursement Rate (SRR) in most middle size and large counties.
These counties serve 80% of the children supported by state
subvention. The insanity, of course, is that it is our highest
quality preschools and centers which are supported by the SRR
and licensed and licensed-exempt homes which are supported by
the RMR. This is an inversion of what should be the case.
Unaddressed, SRR programs will be forced to drop their Title 5
(high standard but high cost) contracts and become centers
meeting only the minimum licensing standards (Title 22). This
does not benefit the children of the State."
Related legislation . SCR 44 (Corbett), pending in the Assembly
Education Committee, states the intent of the Legislature to
review the RMR survey in each year that the survey is not being
implemented to determine the affect of the RMR on specified
outcomes.
REGISTERED SUPPORT / OPPOSITION :
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Support
California Child Development Administrators Association
(sponsor)
California Child Care Coordinators Association
Child Care Planning Council
Child Development Policy Institute
Professional Association for Childhood Education
Riverside County Child Care Consortium
Shasta County Office of Education
Two individuals
Opposition
None on file
Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087