BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SB 1109
S
AUTHOR: Cox
B
AMENDED: As Introduced
HEARING DATE: April 14, 2010
1
CONSULTANT:
1
Dunstan/cjt
0
9
SUBJECT
California Children and Families Program: funding
SUMMARY
Eliminates existing allocations of tobacco tax revenue
under Proposition 10 to state and local county children and
family's commission accounts and, instead, requires those
funds to be used for the Healthy Families and Medi-Cal
programs.
CHANGES TO EXISTING LAW
Existing law:
Establishes the California Children and Families Program
(CCFP), commonly known, as the First 5 program, through the
enactment of Proposition 10 in November 1998, which is
funded by $.50 tax per pack of cigarettes and an equivalent
tax on tobacco products.
Establishes the California Children and Families Trust Fund
to receive revenue from the tax on tobacco products and
requires the revenues to be appropriated for the purposes
of promoting, supporting and improving the development of
children from birth to five years of age and to offset
Continued---
STAFF ANALYSIS OF SENATE BILL 1109 (Cox) Page 2
certain revenue losses to Proposition 99 programs.
Creates the California Children and Families Commission
(CCFC), with members appointed by the Governor, the Speaker
of the Assembly, and the Senate Rules Committee, to
administer the program, formulate statewide program
guidelines, distribute educational materials, provide
technical assistance to counties and conduct research and
evaluation of early childhood development programs.
Requires specified percentages of moneys to be allocated
and appropriated from the trust fund to the CCFC and to
First Five county commissions for various activities
relating to, and furthering the goals and purposes of,
Proposition 10. Existing law specifies that 20 percent
goes to separate accounts of CCFC and 80 percent goes to
county commissions, as specified.
Prohibits Proposition 10 from being amended by the
Legislature except by a statute that furthers the
initiative's purposes and is enacted by a two-thirds vote
of each house of the Legislature.
This bill:
Eliminates the allocation of moneys to the CCFC and county
commissions and, instead, requires funds to be allocated to
the General Fund for appropriation by the Legislature for
the Healthy Families and Medi-Cal programs.
Abolishes the CCFC and county commissions 90 days after the
enactment of this bill. Requires unencumbered funds from
the county commission be equally divided between the county
offices of education, for transfer to school districts
within the county and the county treasurer to be divided
between the county and incorporated cities within that
county, as specified.
Provides that the applicable provisions of the bill would
take effect only upon approval of voters as an amendment of
a specified initiative statute. Directs that the
provisions of the bill shall be submitted to the voters in
accordance with existing law. Provides that the provisions
of the bill are severable.
FISCAL IMPACT
STAFF ANALYSIS OF SENATE BILL 1109 (Cox) Page 3
Unknown. This bill has not been analyzed by a fiscal
committee. According to the CCFC, in the 2008-09 fiscal
year, revenues were approximately $550 million.
BACKGROUND AND DISCUSSION
Need for the bill
The author states that SB 1109 will offer a solution to
California's health care challenges. The author contends
that the elimination of the 58 county commissions and
certain accounts established in the Trust Fund will free up
Proposition 10 funds to be spent on providing health care
services. The author points to reports from the Bureau of
State Audits that identified questionable and inappropriate
payments to contractors and also violations of state law
and policies. The author also points to press accounts
that raise serious questions about the operation of the
county commissions. The author also notes that the surplus
for the state and county commissions was almost $2.5
billion last year.
Proposition 10
Enacted in November of 1998, the purpose of Proposition 10
was to create a coordinated, integrated, and comprehensive
statewide program that supports early childhood development
services from the prenatal stage to five years of age.
Research presented by the Carnegie Corporation and others
at the 1997 White House Conference on Early Childhood
Development and Learning showed that the first three years
of a child's life are critical, not only for healthy brain
development, but also for the physical, social, emotional,
and intellectual growth of the child. Recent findings from
the National Institutes of Child Health and Human
Development show a link between early child care
experiences, family characteristics, and children's
developmental outcomes.
The Proposition 10 statute expresses intent to allow
counties flexibility to create an efficient means of
providing for these services:
It is the intent of this act to facilitate the
creation and implementation of an integrated,
comprehensive, and collaborative system of
information and services to enhance optimal early
childhood development and to ensure that children
STAFF ANALYSIS OF SENATE BILL 1109 (Cox) Page 4
are ready to enter school. This system should
function as a network that promotes accessibility
to all information and services from any entry
point into the system. It is further the intent
of this act to emphasize local decision making,
to provide for greater local flexibility in
designing delivery systems, and to eliminate
duplicate administrative systems.
First Five county commissions
First Five county commissions partner with a range of
agencies to provide early childhood education,
developmental screenings and services, child health
programs, and family services such as literacy, parent
education and support, mental health, and assistance with
basic needs. Each county board of supervisors appoints the
members of the county commission. County commissions are
responsible for developing a strategic plan that describes
program goals and objectives, specifies services and
proposed projects and includes performance measures.
County commissions are also subject to the legal
requirements of public hearings, periodic review and annual
audit.
According to the First Five Association of California,
approximately two million children and their families
received direct services from First Five-funded agencies in
2008-09. In particular, 144,000 children received oral
health treatment, 60,000 children were screened for
developmental delays and 25,000 newborns and their mothers
received home visits that encourage breastfeeding and
parent-child bonding, programs designed to reduce the need
for return visits to the hospitals. Early studies showed
that most children served were Latino (78 percent), came
from families who primarily speak a language other than
English (71 percent), were from low-income households (65
percent), and had mothers who did not have an education
level higher than high school or GED equivalent (53
percent.
First Five-funded child health programs
In addition to promoting early childhood development and
family support services, county commissions administer a
variety of programs to improve child health. According to
the First Five Association of California, in 2005-06, 40
percent of county commissions provided direct health care
STAFF ANALYSIS OF SENATE BILL 1109 (Cox) Page 5
services, and 533,585 individuals received those services.
Statewide, the program funded 134 tobacco cessation
programs, 255 prenatal care and childbirth education
programs, 148 breastfeeding assistance programs, 351
nutritional education and assessment programs, 363 health
insurance and enrollment assistance programs, and 264 oral
health programs. The CCFC has also recently launched
statewide initiatives on childhood asthma, family and
childhood mental health, and oral health.
The State Commission is also providing matching funds to
counties for an expanded health insurance program called
"Healthy Kids." This program is designed to insure
California children who do not qualify for Medi-Cal or
Healthy Families. Through matching funds, the State
Commission helps pay for part of the Healthy Kids health
insurance premiums for these children. Twenty-three county
commissions also provide funding. More than 76,000
children between the ages of zero and five are enrolled in
Healthy Kids.
Additionally, the California Children and Families
Commission voted to grant the Managed Risk Medical
Insurance Board $81 million for the purposes of providing
Healthy Families coverage for children age zero to five.
This action last year was in response to cuts in state
funding for the program in the 2009-2010 budget and enabled
the program to avoid creating a waiting list for children
in this age group.
State Auditor's 2004 and 2006 reports
In July 2004, the California State Auditor released a
report based on their audit of the spending and contracting
practices of the CCFC and of five county commissions (Kern,
El Dorado, Los Angeles, San Diego, and Santa Clara). The
audit revealed that some county commissions lacked
well-defined, documented policies and practices for
awarding contracts to service providers, lacked clear
policies limiting administrative spending, and showed
minimal reporting of program performance data, or
outcome-based data. As a result of these findings, AB 109
(Chan - Chapter 284, Statutes of 2005) and SB 35 (Florez -
Chapter 243, Statutes of 2005) expanded and clarified
auditing and public hearing requirements.
An October 2006 Auditor's report found instances where the
STAFF ANALYSIS OF SENATE BILL 1109 (Cox) Page 6
CCFC advanced funds to three media relations contractors,
in violation of contracting provisions in state law. The
Auditor also found that the CCFC did not ensure that
contractors provided appropriate services, did not always
follow state policy in using competitive bid processes, did
not always review and approve subcontracts and
subcontractors' conflict-of-interest certificates, and
intentionally used memoranda of understanding with counties
to avoid having to comply with contracting requirements.
Arguments in opposition
The First 5 Association argues that Proposition 10 provides
a unique funding source because it is based on local
decision making to meet the greatest local needs. They
note that First 5 commissions currently fund a wide range
of health and development services, quality child care and
early education, support for at-risk families, child abuse
prevention, home visitation, early intervention for
children with special needs, parenting education, family
literacy, nutrition and anti-obesity efforts. They point
out that this measure is being considered less than 11
months after the voters of California rejected a similar,
though less significant change, when they defeated
Proposition 1D by a margin of 66 percent opposed to 35
percent in favor. The California State Association of
Counties argues that county comissions currently fund a
variety of health care services throughout the state. By
taking the funds, they argue, it will end the kind of
support of health insurance enrollment and children's
health initiatives would end.
Prior legislation
SBX8 41 (Cox) contains substantially similar provisions as
contained in this bill. This bill was heard in Senate
Health on February 24, 2010 and failed passage in
committee.
Proposition 1D, Children Services Funding, placed on the
ballot by AB 17 (Evans) Chapter 11, Statutes of 2009, would
have made changes which are necessary to amend the
California Children and Families First Act, including
transferring of CCFC reserves to the state general fund,
transferring of revenues for a five-year period and
eliminating the media account. The transferred funds were
to be earmarked for specific health and human services
programs for children five and under, including Medi-Cal,
STAFF ANALYSIS OF SENATE BILL 1109 (Cox) Page 7
foster care, child care subsidies and preschool programs.
Proposition 1D was defeated on the May 2009 statewide
special election ballot, with 34 percent of the electorate
voting yes and 66 percent no.
SBX3 25 (Cox) of 2008, subject to voter approval, would
have eliminated the allocations to various accounts and,
instead, would have provided that those funds, with
specified exceptions, be transferred to the General Fund
for appropriation by the Legislature for purposes of the
Healthy Families program and the Medi-Cal program. This
bill was not acted on prior to the adjournment of the Third
Extraordinary Session.
SBX1 5 (Cox) of 2008 would have eliminated existing
allocations of tobacco tax revenue under Proposition 10 to
state and local county children and families commission
accounts and required, instead, that those funds be used to
provide health care services and health care initiatives,
including, but not limited to, the Healthy Families
program. This bill failed in Senate Health Committee.
SB 893 (Cox) of 2007 contained substantially similar
provisions as contained in SB 1109. This bill failed in
Senate Health Committee.
AB 2932 (Chan) Chapter 111, Statutes of 2006, specified
existing statutes that must be covered by the policies
adopted by a county commission regarding commission
members' conflicts of interest, including the Political
Reform Act.
AB 2150 (McCarthy) of 2006 would have deleted certain
provisions established under Proposition 10 that allocates
funds from the Trust Fund to the CCFC for specified mass
media communications and the administrative functions of
the commission and, instead, would have required those
funds to be used for the purposes of the California Ready
to Start Program. This bill was set to be heard in the
Assembly Education Committee, but the hearing was cancelled
at the request of the author.
SB 35 (Florez) Chapter 243, Statutes of 2005, expands
auditing requirements under the California Children and
Families Act of 1998.
STAFF ANALYSIS OF SENATE BILL 1109 (Cox) Page 8
AB 109, (Chan) Chapter 284, Statutes of 2005, added
requirements that a county children and families commission
must meet in order to receive funding under the California
Children and Families Program.
AB 2800 (Chan), Chapter 245, Statutes of 2002, authorized
the CCFC to use its funding to support school readiness
activities, and clarified that the CCFC may grant funds to
local commissions.
Support: One individual
Oppose: 100% Campaign, a collaborative of Children Now,
Children's Defense Fund-
California, The Children's Partnership,
California Children's Health Initiatives, United
Ways of California, and PICO California
AFSCME
Alum Rock Counseling Center, Inc.
American Academy of Pediatrics, California Chapter 4
Burn Institute
California Academy of Family Physicians
California State Association of Counties (CSAC)
Child Abuse Prevention Council of Contra Costa
County
Child Abuse Prevention Council of Sacramento, Inc.
Child Advocates of Nevada County
Children and Families Commission of Orange County
Children Now
Children's Health Initiative Napa County (CHI)
Children's Health Initiative of Greater Los Angeles
(CHI)
Chino Valley Unified School District
Community Health Awareness Council (CHAC)
County Health Executives Association of California
County of San Bernardino, Board of Supervisors
County of Sonoma, Board of Supervisors
Court Appointed Special Advocates (CASA)
First 5 Association of California
First 5 California (the California Children and
Families Commission)
First 5 Fresno County
First 5 Kings County
First 5 LA
STAFF ANALYSIS OF SENATE BILL 1109 (Cox) Page 9
First 5 Sacramento
First 5 San Diego
First 5 Solano Children and Families Commission
First 5 Ventura County
Family Service Agency
Healthy Smiles for Kids of Orange County
Hearts & Lives
Hueneme Elementary School District
Human Services Department County of Sonoma
Interface Children Family Services
Las Positas College
Marin Literacy Program
Mariposa County Board of Supervisors
Mariposa County Public Health Department
Men's Alternative to Violence of Mendocino County
Modoc County Special Education Local Plan Area
(SELPA)
MOMS Orange County
Parent Services Project
Performing Arts Workshop
Pretend City Children's Museum
Saint Thomas Aquinas Parish
Shelter Network
Southern Trinity Joint Unified School District
Stanislaus County Children and Families Commission
Stone Soup Fresno
Tehama County Public Health Advisory Board
Tuolumne County Superintendent of Schools
Trinity County Office of Education
United Way Silicon Valley
West End Family Counseling Services
Williams Family Action Center
Women's Recovery Services
Numerous individuals
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