PRESCHOOLS AND CENTERS TARGETED FOR BIGGEST EARLY CHILDHOOD EDUCATION BUDGET CUT

by Timothy Fitzharris, Legislative Advocate|Child Development Policy Institute (CDPI)Information Bulletin - March 4, 2011 | http://bit.ly/fItkRX

Everyone knows that Title 5 Preschools, Centers, and Family Child Care Home Education Networks are reimbursed on a fixed (not market-adjusted) Standard Reimbursement Rate (SRR).  The SRR has not been increased for some years, and it has fallen below the Regional Market Rate (RMR) in the high costs areas of the state which serve most of California’s low-income families.  (ED. NOTE:  These facts were recognized by the Legislature last session by the passage of SCR 47 – DeSaulnier.)  Last session, center-based reserves – which enabled their survival during the 100 day-late State Budget standoff – were swept and capped at 5%.

Now, in the final Conference Committee action, comes the biggest blow of all: the potential of a 25% decrease in funding for SRR-supported schools and centers.  This comes from the combination of a 15% across-the-board reduction and an (up to) 10% cut in the SRR itself. (ED. NOTE:  This does not even take into account the fiscal impact of the other Committee decisions: the elimination of older children, the lowering of the income ceiling for subsidy eligibility, higher family fees, the loss of federal Quality Improvement funds, and the sweep of First Five funds supporting 2nd and 3rd years of grants.)

The Impact?  The Field is being surveyed as you read this.  One Los Angeles program told me this morning that it would probably need to cut salaries of all staff by 13% to achieve a 10% rate cut.  “I don't know how many staff will quit; they are paid so little already.  The combination will close many programs.”   A San Joaquin program with many centers predicted: “We will (1) eliminate all or most infant care and serve school age with the CCTR funds in order to work within the 10% SRR cut, and (2) close a couple of locations where leases are expiring in June.”  “The Legislature needs to understand that babies will not be served due to the high costs, and contractors will need freedom to reorganize in order to remain solvent,” the director said.

California’s preschools and centers are the best deal for the money.  Most often, they are less expensive that RMR center providers, 40% cheaper than many Head Start programs, and cheaper that some of the nationally touted programs (For example, they are 30% of the cost of New Jersey’s touted preschools).  Research has found that California’s PreK programs have cognition, math, print, and spelling achievement gains higher than most national programs; and higher ECERS and CLASS quality measurement scores.  (See data from National Institute for Early Education Research, presented by Dr. Steve Barnett of Rutgers, at “What’s Working, What’s Not, and Why” presentation in Sacramento, September 23, 2010.)

What should be done?  All legislators should be contacted about the above ASAP.  CCDAA is recommending the originally-proposed $150 million deferral or the $100 million from TANF, instead of the SRR rate cut.

More on the Democrats’ Budget Compromise

Last night, I sent you a CDPI Bulletin on the Child Care and CalWORKs cuts by the Budget Conference Committee.  Relative to the former, here’s some more that I have learned:

• The funding for Centralized Eligibility Lists was eliminated and the funds transferred to direct care services (not in conference.).  There may be, however, some behind-the-scenes maneuvering concerning CELs after the Budget is passed.
• The effective date for most of the reductions was written as June 1st, but I think they meant July 1st, the start of the State’s fiscal year.
• The restoration of Stage 3 in the Current Year is NOT affected by the reduction proposals.
• Our CCDF Quality Improvement funds are reduced by $16 million to account for the loss of one-time, federal ARRA funds “in a manner that is consistent with legislative intent and prioritization of programs.” (not in conference)
• Approved the elimination of the “refundable” portion of the Child and Dependent Care Expense Credit and allocates the savings to the direct provision of child care for eligible households.  Retains the core Child and Dependent Care Tax Credit program.
• Approves savings of up to $69 million for CalWORKs Stage 1 child care conforming to actions taken in the child care package.
• Family fee increase is a 10% increase to the current scale.
• APP Administration/Family Support and the RMR were not affected.  It’s not clear, but I think that the RMR is still based upon the 2005 market survey (2004 costs).

Here is how 70% of the SMI comes out:  monthly income ceiling at 75% of SMI (existing ceiling) for family of 1 or 2 = $3,518.00; of 3 = $3,769.00.  At 70% of SMI, family of 1 or 2 = $3,283.47;  of 3 = $3,517.73;  of 4 = $3,908.80.

I provide significant detail on the Budget Conference Committee’s actions, including on the Revenue Extension Proposals and Other Revenue Proposals, Redevelopment, Realignment Phase One – Public Safety, Health, Mental Health, and Proposition 10, Local Jails and Probation, and K-12 Education, in today’s Capitol Plus.  Please access the Capitol Plus, which is available now on a subscription basis, on the CDPI’s website (www.cdpi.net).

The Proposition 10 Non-Ballot Strategy

According to the Sacramento Bee, lawmakers are revising their budget plan so the State can use $1 billion in First Five tobacco tax money for children's Medi-Cal services without going to the ballot.  Lawmakers believe that if they take the money only once, they can do so on a two-thirds vote of the Legislature.   Democratic leaders are trying to negotiate the matter with the First 5 commissions, with the upside being that the State would not take future revenues as the Governor had proposed.

For more on the Proposition 10 Budget play, please access the Capitol Plus on the CDPI’s website (www.cdpi.net)

Brown Labels Tax Extension Ballot Measure

Governor Brown has released language this week, dubbing the June ballot measure the "Public Safety and Public Education Act of 2011."   There is a concern whether the June ballot would have one, or several, measures to implement (or not) the Governor’s plan.

Darrell Steinberg (D-Sacramento), President Pro Tem of the Senate, is quoted by the Sacramento Bee as saying, "I do think that simplicity is important."  "It complicated and already difficult challenge with five ballot measures.   One ballot measure makes a whole lot of sense."

Alameda Judge Issues New Order on Stage 3 Veto Impact

Alameda County Superior Court Judge Wynne Carvill has issued a new Supplemental and Stipulation Order.  The Court wants to protect Stage 2 and 3 “holding” families are protected.  He gives detailed instructions to CDE which will issue Management Bulletins next week.  You know where to find more on this subject: the Capitol Plus.

Reminder: This is the ninth issue of the revised model of CDPI’s Bulletin.  Each article above, under the same heading, is expanded in the just-posted CDPI Capitol Plus.  Don’t miss the timely detail and analysis to which you have become accustomed.  Please go to www.cdpi.net. to subscribe.  It’s only $49 for the calendar year!

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The Child Development Policy Institute (CDPI) is a non-partisan, independent organization whose mission is to help establish sound public policy that benefits the children of California.  CDPI is a leader in the childcare and development field on fiscal and policy matters, and a principal advocate for children and families in the California budget process.  Originally part of the California Children’s Lobby, CDPI was founded in 1993 and is lead by a board of diverse individuals from the education, early education, and child care fields. 
Child Development Policy Institute, 6355 Riverside Boulevard, Suite T, Sacramento, CA  95831  (916) 429-8792  Fax (916) 429-8764  www.cdpi.net.