Child Care Funding in the May Revise

Governor Newsom’s  May Revise of the state budget expands upon the commitment he made in January to support families and especially families with children.

The agreement to fund SB 321,  “Strong Start for CalWORKs Families Act,”  (sponsored by the Child Care Law Center and Parent Voices) is most significant, with the biggest impact on low-income children’s early learning opportunities.

Changes to child care and early learning funding from the January budget proposal are as follows:

  • $40.7 million in General Funds (GF) in 2019-20 and $54.2 million in GF ongoing to bring 12 month eligibility into the CalWORKS Stage 1 child care program.  The Governor notes “this will provide CalWORKs clients consistent child care access while their work activities stabilize.”
  • $80.5 million ongoing from the Proposition 64 Cannabis tax revenues to pay for center-based afterschool and summer care for up to 9,600 school-age children. Funds are allocated from 60% of the tax revenues available for education, prevention, and treatment of youth substance use disorders and school retention.
  • $12.8 million for a pilot program for Alternative Payment Programs to provide emergency vouchers for families on the waiting list who are in crisis and need temporary child care.
  • $2.2 million of ongoing federal Child Care Development Funds (CCDF) for Quality Counts California.
  • $38.2 million ongoing GF to supplement the Stage 2 and Stage 3 funding to account for an additional 14,000 children receiving child care services.  This caseload increased resulted from the adoption of increased income eligibility and 12 month eligibility rules.
  • Reduces proposed State Preschool increases by $93.5 million by postponing the release of the additional 10,000 preschool slots until April 1, 2020.  The Governor also stepped back from additional funding in the following two years to reach goal of 200,000 additional spaces by 2021-22, based on slowing revenues.
  • Keeps the $10 million from the January proposal to develop a master plan for early childhood education
  • Reduces from $750 million to $600 million the January proposal of using one-time GF for full-day Kindergarten facilities expansion.  Increases the state share from 50% to 75% for schools converting from part-day to full-day K, with prioritization for high need communities.

Items not addressed in the May Revise

  •  Approximately $110 million in additional CCDBG funds that were added to the 2018- 19 budget. The Administration is treating these ongoing funds as one-time money.
  • A strong start for all children in low income families requires 100,000 spaces over the next three years and an additional $333 million this year.
  • $62.5 million to update the Regional Market Rate (RMR) survey using 2018 data, effective January 2020.

Continuing on his theme of supporting families, the Governor made the following related proposals:

  • $800 million revenue reduction to increase to $1,000 per family the state Earned Income Tax Credit available for families with children under the age of 6.
  • $55 million in tax expenditures remove the sales tax from diapers and menstrual products
  • Provide an additional two weeks per parent or family member of Paid Family Leave, from 6 weeks to 8 weeks. Funds would come from the Employment Development Division Reserve Account.
  • $10.7 million increase for home visiting program to reach more families in the CalWORKs program. $8 million for the California Home Visiting Program and Black Infant Health.
  • $25 million in 2019-20, $20 million in 2020-21, and $15 million in 2021-22 (all Proposition 56 funds) to train providers who will be administering early developmental and trauma screenings

The Legislature takes the next step. Many important child care and early learning bills are making their way through the Assembly and Senate. Each house is developing its own budget proposals. If necessary, they will reconcile them in Conference Committee. They will then seek to reach agreement with the Governor, before the final deadline of June 30.

May 9, 2019