BILL ANALYSIS
SCR 47
Page 1
SENATE THIRD READING
SCR 47 (DeSaulnier)
As Introduced May 14, 2010
Majority vote
SENATE VOTE :24-11
EDUCATION 6-2
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|Ayes:|Brownley, Ammiano, | | |
| |Arambula, | | |
| |Carter, Eng, Torlakson | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Nestande, Miller | | |
| | | | |
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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
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programs are at risk of closure.
2)Resolves that the Legislature recognizes the value and
contribution of Title 5 child development centers and
preschools and the serious inequity in the fiscal support of
these programs. Resolves that the Legislature intends to
increase its funding in future years, as resources become
available.
FISCAL EFFECT : According to the Legislative Counsel, this bill
is nonfiscal.
COMMENTS : 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
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 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
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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 require 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 Standard Reimbursement Rate (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 pending in the Legislature 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), pending in the Assembly
Education Committee, 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
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."
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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.
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
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.
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.
SCR 47
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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."
Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087
FN: 0004929