BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1225 (Yee)
          
          Hearing Date:  05/03/2010           Amended: 04/28/2010
          Consultant:  Dan Troy           Policy Vote: ED 6-2
          _________________________________________________________________ 
          ____
          BILL SUMMARY:   SB 1225 would extend an existing pilot project  
          that authorizes the city and county of San Francisco to  
          implement an individualized child care subsidy plan for an  
          additional five and one half years.  The pilot would sunset on  
          June 30, 2016 rather than on January 1, 2011.  
            
          _____________________________________________________________________
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
                                                                  
          SF pilot                          $2,000           $4,000$4,000   
           General*

          *Counts toward meeting the Proposition 98 minimum funding  
          guarantee
          _________________________________________________________________ 
          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense File.
          
          Chapter 725 of the Statutes of 2005 (SB 701, Migden) created a  
          pilot project in which San Francisco was permitted to create an  
          individualized child care plan.  The purpose of the pilot was to  
          extend flexibility to San Francisco to, among other things,  
          supersede state law with regard to eligibility criteria, fees,  
          and reimbursement rates, in order to make child care more  
          accessible to families in the area and to recognize the cost of  
          meeting required regulations (e.g., staffing ratios, training  
          and education criteria) in a high-cost region.  SB 701 specified  
          certain reporting responsibilities and required San Francisco to  
          show an increase in the aggregate days of enrollment from the  
          last quarter of the 2004-05 fiscal year.  Currently, the  
          standard reimbursement rate (SRR) for Title 5 child care  
          providers is $34.38 per day and family income eligibility for  
          service is capped at 75 percent of the state median income.











          According to the sponsors, under the pilot program, San  
          Francisco has been able to increase the services provided during  
          the pilot by implementing a plan that, in part, increases the  
          rate of reimbursement to providers ($36.63 per child day for  
          contractors other than the San Francisco Unified School  
          District, which receives $39.52) and by increasing eligibility  
          up to 85 percent of the state median income.  Funding is  
          available to do this through a combination of resources,  
          including assessed family fees and the reallocation of unearned  
          contract funds.  Absent the pilot, the unearned funds would be  
          returned to the state and reallocated for other uses.  The cost  
          to the state of this foregone savings is estimated to have been  
          approximately $4 million annually over the past two years of the  
          pilot program.  Staff assumes similar costs going forward if the  
          pilot is extended.