Budget Update: Proposed Cuts to Child Care

Quality child care is a vital necessity for working families with young children, allowing parents to work and/or attend school. But with the current economic crisis, affordable quality child care is becoming increasingly hard to find. Many low-income families can expect even more difficulties in securing child care if three of Governor Schwarzenegger's budget proposals are passed:

• Reduce reimbursement rates for licensed providers ($19 million) and license-exempt providers ($113 million): The governor has proposed lowering rates for licensed child care providers to the 75th percentile of the 2005 Regional Market Rate (RMR) survey, resulting in an estimated $19 million in savings for the state. Another $113 million would also be cut by reducing reimbursements for license-exempt providers from 90 percent to 70 percent. This change in reimbursement could potentially reduce the ability of providers to stay open.

• Reduce CalWORKs Stage 2 ($12.6 million) and Stage 3 ($1.2 million) programs: CalWORKs is a state program providing qualified low-income families with financial assistance and child care subsidies while they attend school or work. This cut reflects changes in the estimated number of children who utilize the child care subsidy, Stage 2 of CalWORKs.

Click here for more information about the difference between Stage 2 and Stage 3 slots.

• Eliminate CalWORKs Stage 3 Child Care Slots ($122 million): The governor has also proposed terminating about 18,000 (roughly one-third) of all Stage 3 slots. About 11,000 of these slots could be eliminated by not backfilling for attrition - as families leave Stage 3, their slots would be eliminated - and the other 7,000 children would be dis-enrolled

Importantly, the Legislative Analyst's Office points out that roughly 200,000 children are already on waiting lists for non-CalWORKs slots, so those families displaced by the proposed elimination of Stage 3 slots would likely find it difficult to find other options.

If passed, these cuts would hurt not just young children, but California's economy. Reducing state child care funding could result in the loss of jobs in the child care sector, at a time when the state's unemployment rate is the highest it has been in 20 years. CalWORKs parents who have lost their state-funded child care may also be forced to choose between working or attending school, and staying at home to care for their children. In the worst case scenario, they may decide to leave their children in substandard care.

State Budget Hearings

To help early childhood advocates navigate through the state budget deliberations and in the event that stakeholders wish to testify at hearings, First 5 LA is providing information on legislative committee meetings and hearings that affect young children and their families. Please check below for dates and times:

• Wednesday, March 24 at 1:30 p.m., Location TBA Assembly Budget Subcommittee #1: Health and Human Services Informational hearing: "Toll on Californians of Adopted and Proposed Health and Human Services Cuts"
• Thursday, March 25 9:30 a.m., Room 4203, Senate Budget Subcommittee # 3 on Health & Human Services Healthy Families Medi-Cal (selected issues)
• Thursday, April 22 9:30 a.m., Room 4203 Senate Budget & Fiscal Review Subcommittee #3 on Health & Human Services Department of Social Services: Children's programs, Community Care Licensing (CCL)
• Wednesday, April 28, Time and Location TBA, Assembly Budget Subcommittee #1: Health and Human Services Dept of Social Services: child welfare, foster care

‹‹Back to this week's Monday Morning Report