Budget Related Information Latest News - updated on May 25, 2017

Women's Caucus Prioritizes child care AGAIN and requests more funding. 

Upcoming Budget Hearings (To listen go to www.calchannel.com) 

Click here to read May Revise Summary.  

 The May Revision proposed fully restoring the promise – NO PAUSE!!

 Significant Adjustments:

  • Standard Reimbursement Rates – An increase of $67.6 million General Fund to increase the reimbursement rate to reflect the full 10 percent increased made at the 2016 Budget Act.  An additional increase of $92.7 million General Fund to provide a six-percent increase to the reimbursement rate for State Preschools and other direct-contract child care and development providers beginning July 1, 2017 
    • Full day non LEA preschool $42.12 per day/$10,530 per year
    • Part-day State Preschool -  $26.31 per day $4,4604.25 per year
    • Full-day State Preschool - $40.46/$10,115 (Promised:  $42.38/$10,596)
  • Regional Market Rate (RMR) – An increase of $42.2 million General Fund (GF) to increase the maximum reimbursement ceiling for voucher –based child care providers to the 75th percentile of the 2016 survey beginning January 1, 2018. Click here for the 2016 Market Rate Survey
    • NOTE:  Included in the May Revise was a 12 month hold harmless for those provider rates that did not increase going to the 2016 Market Survey.  It must also be a priority as rates increase that NO PROVIDER WILL BE HARMED.  We must remove the sunset date so that no provider rates will be decreased.
  • Full-Day State Preschool – An increase of $7.9 million Proposition 98 for an additional 2,959 slots 
  • CalWORKs Stage 2 – A decrease of $18.1 million non-Proposition 98 GF in 2017-18 to reflect estimates for CalWORKs Stage 2 caseload and the cost per case 
  • CalWORKs Stage 3 – A decrease of $12.8 million non-Proposition 98 GF in 2017-18 to reflect estimates for CalWORKs Stage 3 caseload and cost per case
  • CalWORKs – a decrease of $34.1 million GF in 2016-17 and $37.3 million GF in 2017-18 to reflect updated caseload average cost per case projections

Budget Bill Information

Governor's Proposed 2017-18 State Budget  - Below are links to information from the Administration, budget committees, and others related to the 2017-18 Proposed Budget.

In the links above, the two from the Department of Finance (DOF) provide more details.  

  • RMR rates are based on funding for a full year; those rates that went into effect January 1, 2017 will be for a full year moving forward.
    •  RMR – 75th percentile of the 2014 survey, held harmless through June 30, 2018, with a license-exempt rate of 70 percent of the family child care home rate
    • New provider rates enacted on January 1, 2017 included an 18-month hold harmless provision for providers whose rates did not go up.  When the 18-month hold harmless provision goes away, in all counties some provider rates will freefall to below 2005 rates.  
  • SRR rates will be funded at five percent, half of what was promised
    • Full-day non LEA Preschool – $40.20/$10,051  (Promised: $42.12/$10,530)
    • Part-day State Preschool – $25.06/$4,385.50  (Promised:  $26.31/$4,4604.25)
    • Full-day State Preschool – $40.46/$10,115 (Promised:  $42.38/$10,596)
  • The 2,959 full-day/full-year State Preschool slots annualized starting April 1, 2017  
    • The promise had included three years of funding 2,959 full-day/full-year State Preschool slots for a total of 8,877  (2,959 x 3 years = 8,877)
  • Reduction in growth from 0-4 population captured
  • Alternative Payment Program funding is up; allocated slots down down.  According to DOF cost of care is based on that captured in Stage 3.
  • Stage 1 child care funding is down; caseload is down
  • Stage 2 funding is up; caseload up
  • Stage 3 funding is up; caseload is down
  • Substantial reduction in federal funding for Early Head Start Partnership Grant
  • Reduction in federal funding for 21st Century before and after school and summer for K-12
  • Trustline funding down
  • Reduction in one-time carry over quality carryover
  • Authorize the use of electronic applications for child care subsidies, making it less burdensome for eligible families to access care and more efficient for providers to process applications.
  • Allow children with exceptional needs whose families exceed income eligibility guidelines access to part‑day state preschool if all other eligible children have been served. This allows part‑day state preschool providers the flexibility to fill unused slots with other students who would benefit from early intervention or education.
  • Align the state’s definition of homelessness with the federal McKinney‑Vento Act for purposes of child care eligibility. Many providers receive both federal and state funds and different definitions of homelessness can be confusing.  See definition below:
According to section 725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(2)), the term “homeless children and youths”—
(A) means individuals who lack a fixed, regular, and adequate nighttime residence...; and
(B) includes—
(i) children and youths who are sharing the housing of other persons due to loss of housing, economic hardship, or a similar reason; are living in motels, hotels, trailer parks, or camping grounds due to the lack of alternative accommodations; are living in emergency or transitional shelters; are abandoned in hospitals; or are awaiting foster care placement;
(ii) children and youths who have a primary nighttime residence that is a public or private place not designed for or ordinarily used as a regular sleeping accommodation for human beings;
(iii) children and youths who are living in cars, parks, public spaces, abandoned buildings, substandard housing, bus or train stations, or similar settings; and
(iv) migratory children who qualify as homeless for the purposes of this subtitle because the children are living in circumstances described in clauses (i) through (iii).
Children and youth are considered homeless if they fit both part A and any one of the subparts of part B of the definition above.
  • Eliminate licensing requirements for state preschool programs utilizing facilities that meet transitional kindergarten facility standards, specifically K‑12 public school buildings.

2017-18 Resource Materials

California Budget Process Flow Chart

Below are two presentations provided at a CAPPA informational meeting in Sacramento on 1/17/2017

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It is important that we as a field, are united and strong in our "asks".  To that end, below are two considerations that we hope to see in all advocacy platforms that are put forth:

  • All provider types and programs must be lifted together; not one part of the child care and early learning system at the expense of another.
  • The mixed delivery system of public and private child care and early learning programs are jointly funded to ensure that absolutely all slots are filled and not one dollar is sent back to Sacramento at the end of the fiscal year.

The 2017-18 Budget: California's Fiscal Outlook 

On November 16, 2016, The Legislative Analyst's Office released its annual Fiscal Outlook report.  The report describes the office's assessment of the state's economy and budget over the 2016-17 through 2020-21 period.

The report discusses child care and some topics of interest include:

  • Overview of State Subsidized Child Care
  • Assumptions Underlying Child Care Forecast
  • Child Care Cost Projected to Increase Notably in 2017-18
  • Out- Year Child Care Costs
  • California in Midst of Responding to New Federal Requirements

Click here to read the full report.

NOTE:  As all are aware, on January 1, 2017 updated Regional Market Rates updated to the 75th percentile of the 2014 survey are set to go into effect for most providers.  However, in every county there were many provider rates that were covered under an 18-month "hold harmless" provision.  What this provision means, is that no provider will go down in rates.  The hold harmless provision is in effect for 18 months.  

At the end of the 18-month hold harmless time frame, in every county there will be provider rates that go down.  During the release of the LAO fiscal outlook, CAPPA asked the question, "What is the amount of the hold harmless language?"  Response.  "$32 million."  

So what does that mean?  It means that effective July 1, 2018, $32 million in provider rates from those providers that fall under the hold harmless provision, will have their rates dropped.  

The CAPPA board has made this a top priority to eliminate this hold harmless language in perpetuity.  If you want to know more about this issue, contact CAPPA.

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October 3, 2016: 

  • The 2016-17 Budget:  California Spending Plan (Click here to read full update).  Below is an excerpt:

    "...2016-17 ends with $8.5 billion in total estimated reserves-up by $1.1 billion from the amount now estimated at the end of 2015-16. This shows that estimated state General Fund revenues ($124.2 billion) exceed total General Fund expenditures ($122.5 billion). Spending includes both ongoing program costs and one-time items, such as $1 billion in state office building replacements. If revenues differ from the budget assumptions-for example, if 2016-17 revenues are higher or lower than the assumed level in Figure 2-reserves would differ from this total."

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2016-17 State Budget Archive