California
Updated 6.2.08
The Governor’s Budget Proposal
The Governor’s budget proposal in January anticipated a funding shortfall, but it was not clear at that time exactly how deep the hole would be. In California each spring, the Governor uses updated spending and revenue figures and issues a May Revision of the budget.
This year’s May Revision of the state budget is a $101.8 billion package, noting a $15.2 billion gap, asking for a $2 billion reserve, and includes a proposal to borrow future lottery revenues in addition to cutting programs to solve the problem. The lottery proposal will be a ballot initiative in November. If rejected, the sales tax will increase instead.
Child Development Programs in the Budget Proposal
•Child development-related programs take a 6.4% cut.
•The reimbursement rate would drop from the 85th percentile of the market rate survey to the 75th percentile. The annual market rate survey was last performed in 2007. They would skip 2008 and move to an every-other-year survey beginning in 2009.
• Licensing inspections, already barely taking place every 5 years, would take place every 7 years in a proposed 50% drop in services.
•The cuts to the general child care fund are a move to ensure that CalWORKS families get child care. The cuts to child care funding will put 17,000 children on a waiting list (putting the work status of their parents at great risk). The general child care fund is not only assistance to low-income working families, but also the funding stream for infant toddler programs, resource and referral, state preschool, and more.
•The eligibility rules will be frozen at the 2007-2008 State Median Income levels.
•With no COLA increase and no increase for program growth, this too functions like a cut because services get more expensive each year. Programs will once again have to do more with less.
Subcommittees Begin Work
On May 27, the Assembly Budget Subcommittee on Health and Human Services and the Subcommittee on Education Finance took action on the budget. Both subcommittees rejected the 6.4% across-the-board cuts for child development, agreed to fund the CalWORKS child care program, adopted the SMI freeze, rejected the reimbursement rate ceiling change, but agreed to a biennial market rate survey.
ECEC will continue to monitor the process until it is completed and will keep you informed.
Other Legislation
In addition to these critical budget issues, there are two pieces of legislation that appear to be on the move in California. Senate Bill 1629 seeks to create a Quality Improvement Commission and Assembly Bill 2759 would consolidate early childhood programs for three and four year olds into one big preschool program.
News and Resources
Child Development Policy Institute
Child Care Law Center budget review
California Budget Project review of the budget impact on child care
Professional Association of Childhood Education (PACE)
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