BILL ANALYSIS �
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 486
S
AUTHOR: Dutton
B
AMENDED: As Introduced
HEARING DATE: April 13, 2011
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REFERRAL: Governance and Finance
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CONSULTANT:
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Trueworthy
SUBJECT
California Children and Families Program: funding
SUMMARY
Eliminates existing allocations of Proposition 10 tobacco
tax revenues to both state and county commissions, and
instead uses those funds to backfill the General Fund 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
(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 certain revenue losses to Proposition 99
programs.
Continued---
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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 5 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 supporting the 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.
FISCAL IMPACT
This bill has not been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
The author states that SB 486 will offer a solution to
California's health care challenges. The author argues
that by eliminating the 58 county commissions and certain
accounts established in the Trust Fund, Proposition 10
funds will be freed up to be spent on providing health care
services.
Proposition 10
Enacted in November of 1998, the purpose of Proposition 10
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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
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 5 county commissions
First 5 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.
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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
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 was in response to cuts in state funding for
the program in the 2009-10 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
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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
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.
2011-12 State Budget
Governor Jerry Brown proposed in his January 2011-12 budget
to re-direct $1 billion on a one-time basis from state and
local commissions' fund reserves to pay for Medi-Cal
services for children up to age five and to redirect on an
ongoing basis 50 percent of state and local commission's
future revenues to fund various state children's programs.
This proposal would result in General Fund savings of $1
billion in 2011-12 and approximately $215 million in
2012-13. The current 2011-12 budget includes re-directing
$1 billion from state and local First 5 commissions to
Medi-Cal on a one-time basis.
The First 5 commissions in Fresno, Madera and Merced
counties have announced they plan to file a petition asking
the Fresno County Superior Court to nullify this action of
the state diverting First 5 revenue. The commissions argue
only voters can approve a state shift of First 5 funds.
Prior legislation
AB 99 (Committee on Budget) Chapter 4, Statutes of 2011,
directs $1 billion from state and local First 5 commissions
to Medi-Cal on a one-time basis.
SB 1109 (Cox) of 2010 contains substantially similar
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provisions as contained in this bill. This bill was heard
in the Senate Health committee on April 14, 2010 and failed
passage.
SBX8 41 (Cox) of 2010 contains substantially similar
provisions as contained in this bill. This bill was heard
in the Senate Health committee on February 24, 2010 and
failed passage.
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,
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
passage in the Senate Health Committee.
AB 2150 (McCarthy) of 2006 would have deleted certain
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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.
AB 109, (Chan) Chapter 284, Statutes of 2005, add
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, authorizes
the CCFC to use its funding to support school readiness
activities, and clarified that the CCFC may grant funds to
local commissions
Arguments in opposition
The First 5 Association of California writes in opposition
to SB 486, stating it would end all local programs the
First 5 commissions fund, including a wide range of health
and developmental 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. AB 99,
recently signed by the Governor as part of the budget "cut
package," will take $950 million directly out of county
commission fund balances, forcing deep cuts in multi-year
programs throughout the state. Opponents argue SB 486 adds
insult to injury, presenting an even greater affront to
local programs and the families they serve.
The American Academy of Pediatrics (AAP-CA) writes, in
opposition, that it makes no sense to secure funding for
Medi-Cal and Healthy Families at the cost of the health,
safety and education programs already serving children in
local communities. AAP-CA also argues that First 5 funds
are critical and help ensure children receive the care they
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need to develop, thrive and ultimately become our next
generation of California workers and leaders.
Opponents argue that funds invested locally by every First
5 county commission are specific to the needs of that
county - not state mandates or top-down directives. SB 486
undermines local decision-making, de-funds a wide range of
successful programs, and takes resources away from families
and young children in greatest need.
POSITIONS
Support: None on file
Oppose: 100% Campaign
Advancement Project
American Academy of Pediatrics, California
Blindness Support Services, Inc.
Brighter Beginnings
California Breastfeeding Coalition
California Child Development Administrators
Association
California Family Resource Association
California Food Policy Advocates
California Head Start Association
California School Employees Association
California School Nurses Organization
California State Association of Counties
Capistrano Unified School District
Center for Oral Health
Centralia School District-School Readiness
Program
Child Abuse Listening and Mediation (CALM)
Child Abuse Prevention Center
Child Advocates of Nevada County
Child Development Policy Institute
Children and Families Commission of Orange County
Children and Families Commission School Readiness
Program
Clovis Family Literacy
County of Tulare Board of Supervisors
Family Service Agency
Family SOUP Family Resource Center
First 5 Amador County
First 5 Association of California
First 5 Butte County
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First 5 California
First 5 Contra Costa
First 5 Fresno County
First 5 Humboldt
First 5 LA
First 5 Lassen
First 5 Mono County
First 5 Monterey County
First 5 San Luis Obispo County
First 5 Siskiyou County
First 5 Solano
First 5 Tuolumne County
First 5 Yolo
Gardner Family Health Network
Great Corona Valley Chamber of Commerce
Happy Camp Family Resource Center
Heart & Lives
High Desert Youth Center
Humboldt County Healthy Start, Schools and
Communities Partnership
Inyo County First Five
Irvine Unified School District School Readiness
Program
Kai Ming Head Start
Mary's Mercy Center
Northern Valley Indian Health, Inc.
Nuview Child Development Programs
Orangewood Children's Foundation
Palomar Pomerado Health, Maternal-Infant/Early
Childhood Programs
Performing Arts Workshop
Pretend City Children's Museum
Professional Association for Childhood Education
Rebekah Children's Services
San Gorgonio Child Care and Development Center
Shandon Joint Unified School District
Sierra View District Hospital
Solano Coalition for Better Health
Solano County Board of Supervisors
Sonoma County Board of Supervisors
St. Mary Medical Center
Stanislaus County
The Gary Center
TLC Preschool
Tree Frog Treks
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Trinity County First 5
Trinity County Office of Education
Ujima Family Recovery Services
United Way of Santa Cruz
United Ways of California
We Care Services for Children
WestCare
Youth & Family Services Inc.
1759 individuals
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