California Child Care Proposals Promote Economic Stability

By Christine Johnson-Staub and Stephanie Schmit

This month, California policymakers have an opportunity to realize the promise of the new federal child care law by enacting Assembly Bill 2150 (AB 2150). The state bill, which was passed unanimously by the California Assembly and Senate Policy Education Committee, would strengthen child care assistance programs by supporting providers, improving stability for parents, and enhancing continuity of care for children. The next step is an August hearing before the Senate Appropriations Committee.

California’s bill would implement key provisions in the reauthorized federal Child Care and Development Block Grant (CCDBG), including a simplified eligibility process and improved stability of payments to providers. The goal is to make it easier for families to get and maintain assistance while also promoting the health, safety, and quality of child care.

AB 2150 comes on the heels of another state victory. The FY 2017 budget, signed into law by Governor Jerry Brown in July, repealed California’s Maximum Family Grant (MFG), a “family cap” policy that limited cash benefits for many low-income families. The budget also included $145 million in new early childhood investments, which will primarily be used to increase provider payment rates for subsidized child care. This is the first significant rate increase in years and will allow families to access a greater share of the child care market. Low payment rates make it financially unviable for providers to offer services for children receiving subsidies; as a result, families are limited in their child care options and many providers can’t afford to invest in quality or provide staff a livable wage.

The budget’s investment in payment rates is an important step in stabilizing California’s supply of child care as well as supporting those who provide it. However, additional funding and policy changes are needed to continue to improve the system.

AB 2150 would leverage key elements of the new federal CCDBG law to further improve financial stability for families and providers. For example, CCDBG now requires a minimum of 12 months’ eligibility (regardless of temporary changes in family income). In addition to providing continuity of care for low-income families, 12-month eligibility makes revenue more predictable for providers.

Beyond implementing these CCDBG provisions, AB 2150 would increase the income level at which families qualify for child care assistance by requiring that current census data be used to calculate eligibility. Further, the bill would allow families to remain eligible for child care assistance as their incomes increase up to 85 percent of current State Median Income (SMI), the federal income eligibility limit.

Taken in combination, these measures would go a long way toward strengthening California’s child care system, as the state suggested in its plan to federal regulators. That plan, which the Administration for Children and Families has conditionally approved, cites AB 2150 as the legislative vehicle for ensuring compliance with many provisions in the new federal law.

CLASP is encouraged by California’s efforts to expand and improve child care services for low-income children. The sheer number of needy  families— combined with a massive, complex child care system—will make it challenging to implement the new federal law, especially as it relates to cost. However, California stakeholders and policymakers have begun to rise to the challenge. Now, it falls on Governor Brown and the California Senate to make AB 2150 law and improve access to quality, affordable child care for low-income working families.

Read more about CCDBG implementation in states >>