April 2024 Federal Budget Update

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Fiscal Year 2025 Budget Overview

The President’s Budget Request was released on March 11 of this year, almost a month after the Budget Act deadline of February 1st.

Budget Highlights:

  • Total spending: $ 7.3 trillion
  • Total revenues: $5.5 trillion
  • Deficit: $1.8 trillion

Federal Budget Child Care Measures

  • New program working families with income up to $200k per year for guaranteed affordable, high-quality child care from birth until kindergarten.
    • Goal: most families pay no more than $10 a day and lowest income families pay $0, this would affect over 16 million children.
  • $8.5 billion for the Child Care Development Block Grant, increasing subsidized child care and related services for over 2 million low-income children.
  • The budget includes funding for universal free preschool for all 4 year olds and aims to create a path to extend preschool to 3 year olds, choosing from public schools, child care providers, or Head Start.

FY25 Budget Next Steps

  • Now: the Senate/House will continue to go through their normal processes of congressional hearings.
  • June/July: House bills will go through the floor.
  • After the November 5 election: final appropriations.

Expiring FY 24 Emergency Child Care Funding

In February, a Nonpartisan group of Senators requested that Congress renew expired emergency funding for child care, which may be reflected in the FY25 Budget. Expiring funds include:

  • Covid Aid, Relief, and Economic Security (CARES): Provided $3.5 billion in emergency funding for CCDBG to support child care assistance for frontline workers and stabilize the child care system.
  • Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA): Provided an additional $10 billion to provide relief and stabilization to working families and the child care sector.
  • American Rescue Plan Act (ARPA): Provides $14.99 billion through CCDBG and $23.975 for a new child care stabilization grant program. ARPA also included an annual increase of $633 million to CCES for a total allocation of $3.55 billion.

Side Notes:

  • The Child Care Development Block Grant or CCDBG authorizes Child Care Development Funds or CCDF for states and territories to disperse subsidized child care.
  • A portion is set aside for Quality Improvement activities (or QI). Resource and Referral programs are funded under the QI allocation.
  • The Child Care Initiative Project (CCIP) is funded through a combination of both QI funding and state match funding.
  • The Consolidated Appropriations Act of 2024 included an increase of $725 million in discretionary funds for the CCDBG. California alone will see an increase of almost $77 million.
    • While these funds are significant, more is needed in order to deliver on the new requirements set by the 2024 Final Rule which caps co-payments at 7% of family income for families. In California AB 116 (effective October 2023) already caps family co-payments at 1% of their monthly income and families below 75% of the state median income (SMI) no longer pay any subsidized child care fees.

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