January 16, 2019

2019 Child Care Budget Analysis

Governor Newsom unveiled his 2019-20 budget proposal last week, signaling a strong commitment to children, families, and the communities in which they live. He proposes 500 million one-time dollars to the child care budget, to go towards improving child care facilities, child care workforce development, and developing a plan to increase access to subsidized child care.

$245 million one-time General Fund for child care facilities: There are no details in the plan, except to say that the purpose is to "expand subsidized child care facilities" in the state. It is not clear if this will only apply to contracted facilities or if it will include facilities that accept child care vouchers. Based on his presentation during the press conference, all indicators point towards benefiting contractors.

$245 million one-time General Fund for child care workforce: There are no details in the plan, though the stated purpose is to "improve the quality of care and move child care professionals along the early education/child care professional continuum."

$10 million General Fund for the State Board of Education to develop a long-term plan to improve access to and quality of subsidized child care: This funding would be used to contract with a "research and analysis entity" to develop a strategic plan that addresses universal preschool, revenue generation, increased access to subsidies, and quality improvement. It makes no reference to the proposals that may come out of the Blue Ribbon Commission this spring.

It’s also important to note that capped programs, including R&R, will receive a 3.46% COLA increase. Furthermore, the Foster Care Bridge program will receive an increase of $4 million, reflecting a draw-down of federal IV-E dollars.

The Governor continued the trend of providing significant funding towards the goal of universal preschool, earmarking $125 million in non-Proposition 98 General Funds in 2019-20, and additional investments through 2021-22 for full day, full year State Preschool for all eligible four-year-olds. All added slots will be provided by non-profit providers and not LEAs.

Despite this meaningful influx of one-time dollars, there is no significant investment towards increasing access to child care vouchers, which offer the flexibility parents need to meet their child care needs. Vouchers are especially important so that families have the flexibility to find the care that fits their needs, and are not limited by time or space in contracted centers that are also in short supply. Governor Newsom proposes a small increase of $15 million, which will result in an additional 983 vouchers. However, we cannot forget that there are over one million eligible children not able to be served by California's subsidy program.

We also cannot overlook that while there is significant one-time investment proposed to improve infrastructure, there is no explicit mention of investing in family child care homes. Most care for infants and toddlers happens in home-based care, whether in licensed family child care homes or with a family, friend or neighbor. These settings are more likely to provide care during non-traditional hours, offer more flexibility, and are more affordable. Unfortunately, the supply of family child care homes experienced a sharp decline during the recession, and in most of California, continues to decline. Low pay and lack of stability have contributed to this decline, and challenges those remaining in business. There is no way the child care needs of California's families can be met without a robust supply of family child care homes, and these small, usually woman-owned businesses cannot remain economically viable without proper support.

The Governor's budget is just the first step in a six-month process that will include hearings, meetings with the Legislature and Administration, and a revision in May followed by negotiations between the Legislature and Governor Newsom. Although the proposed investments are not prioritized how we would like, we are extremely pleased that this initial budget demonstrates strong value placed on young children, families, and Californians struggling to make ends meet. It is, in fact, a great starting point. We will undoubtedly need all of your voices to amplify the needs of families and home-based providers through the Spring, to ensure their priorities are met in the final budget bill.

Here are several other proposals in the budget that will benefit families:

$347.6 million to increase CalWORKs grants to 50% of the Federal Poverty Level: This increase ($103/month for a family of three) is a central component of the Lifting Children Out of Poverty Task Force's effort to end deep child poverty. If the proposal remains in the final budget, their goal will be reached six months ahead of schedule.

$45 million to the Department of Health Care Services for ACEs screenings for children and adults in the Medi-Cal program: As R&Rs continue to deepen their work around trauma-informed care and practices, this expansion of ACEs screenings to children and adults under age 65 to at least once every three years will be a welcome addition to ensuring the health and well-being of many Californians.

$60 million for the Department of Health Care Services to increase developmental screenings for children: Developmental screenings has consistently been mentioned as priorities among many R&Rs. The increased ACEs and developmental screenings are expected to help identify families and individuals who should be referred to other services, a role many R&R agencies are well equipped to take on.

Extended Paid Family Leave: The governor states that his Administration wants to expand Paid Family Leave to ensure newborns and newly adopted babies can be cared for by a parent or close family member for the first six months. A task force will be convened to consider phase-in options as well as other ways to encourage participation, such as increased wage replacement and worker protections.

$78.9 million for home visiting programs: To improve health outcomes, funding is proposed to provide home visiting to eligible CalWORKs families with a child under the age of 24 months, for up to two years. Priority is given to first time parents. Additionally, $30.5 million is proposed to expand home visiting programs and the Black Infant Health Program in the Department of Public Health.

For an analysis of the entire budget, please review the California Budget & Policy Center's report.