State Budget Update: Budget Delay Threatens Child Care Centers

The stalled budget poses problems to many service providers in California, including state-subsidized child care centers. According to the State Controller's Office, the state may not legally pay many of its vendors without a budget in place. As a result, many child care providers throughout California are beginning to feel the pressure.

The California Department of Education (CDOE) noted that many contractors surveyed were planning to temporarily close their doors if a state budget was not enacted by July 1, leaving thousands of low-income families in the lurch. A recent report from the Legislative Analyst's Office notes that state and federal funding supports child care and development programs for over 540,000 children from low-income families in California.

Child care providers also reported to the CDOE that the Governor's May Revision proposal to eviscerate child care funding is a major factor in the decision to either lay off workers, turn away families who rely on state subsidies for child care, or shutter centers completely. Even though lawmakers rejected the governor's proposal, child care centers are not guaranteed payment.

Meanwhile the budget battle intensified last week as State Controller John Chiang filed suit to block Governor Arnold Schwarzenegger from reducing pay for most state workers to the federal minimum wage. The governor had previously filed a petition of his own to force the controller to reduce state worker wages to $7.25 an hour. Although the Court of Appeals recently ruled that the governor has the authority to cut wages during a budget impasse, Chiang's suit argues that the governor's letter ordering minimum wage is legally deficient because it violates federal and state laws.

Chiang also contends that the existing payroll system is not designed to handle dramatic changes and would likely not function properly if worker pay were reduced to minimum wage.

Additional Reading:

• Press Enterprise: Riverside child care center may close
• Los Angeles Times: California budget woes cast shadow over day-care centers
• San Diego Union Tribune: Affordable child care key to jobs