The California Legislature took steps Tuesday to respond to the calls of the state’s child care sector to increase what the state pays to support the system.
They emerged with a new early learning and care package that doubles the number of subsidized child care slots proposed by Gov. Gavin Newsom and changes in how child care centers are paid in an effort to rescue the fragile system.
While Newsom expanded transitional kindergarten and created 100,000 new subsidized child care slots in the May revision to his budget, state legislators and child advocates argue that he didn’t go nearly far enough.
That’s why the Legislature’s proposal includes $1.5 billion earmarked for adding 200,000 more subsidized care slots as well as $1.1 billion in ongoing funding for rate reform. Other key changes include rolling out transitional kindergarten over four years instead of three, as the governor planned, with a smaller teacher-to-child ratio and after school child care, and decreasing family fees for subsidized child care, all moves aligned with the spirit of the Master Plan for Early Learning and Care.
“The big picture is that this is a historic budget,” said Assemblyman Kevin McCarty, D-Sacramento. “We frankly have a once-in-a-political-generation opportunity to make some transformational investments in our public education system with this economic boon for California’s wealthiest individuals, essentially giving us an opportunity to look at what we have in the budget to make some long-term investments in our kids and our future.”
California currently has two different ways of paying for care for low-income children. Some centers have contracts with the state to enroll a certain number of low-income children each year. These centers get a flat rate for each child, based on age and special needs.
Other centers and family child-care homes do not have contracts with the state, but they can enroll children who qualify for subsidized child care through vouchers.
These centers are paid varying rates based on regional costs. As a result, the state sometimes pays higher rates to centers that accept vouchers, even though they have more children in each classroom, lower education requirements for teachers and no required curriculum, than it pays centers that have to meet higher standards.
“Rates and slots are intrinsically linked. Early educators need to be paid dignified wages via rates that incentivize them to serve families who have child care subsidies,” said Mary Ignatius, statewide organizer of Parent Voices, a California parent advocacy group. “Families can’t access care if providers have to close their businesses because they cannot keep up with the costs.”
For years, legislators, advocates and child care providers have been urging the state to tie all rates to the actual market cost in each county and pay more to centers that provide higher quality care.
Now, the pandemic casts the need for child care reform into high relief, many say. Many families can’t find the care they need, and many child care providers can’t pay their bills.
“These are the women who care for our most precious people, our children, every single day through the pandemic. I feel like these women took a hit for all of us,” said Sen. Connie Leyva (D-Chino), chair of the Senate Education Committee and a longtime proponent of rate reform. “To not have rate reform included in the budget, it’s just an insult to all of these working women and, really, women of color.”
Outdated payment rates that don’t accurately reflect the actual cost of running a center have helped fuel the shrinking of the sector, experts say. The number of family child care homes has long been falling, decreasing by a third between 2008 and 2019, according to the California Child Care Resource & Referral Network, which means fewer seats for children. That’s an urgent issue in a state with almost 3 million children under five.
“We can’t afford to not raise payment rates for providers in our subsidized child care system,” said Kristin Schumacher, senior policy analyst for the California Budget and Policy Center, a nonprofit research organization. “These providers and their staff risked their lives to provide care for children throughout the pandemic, including school-age children who typically would have been in school.”
In a high-turnover industry with low pay, it’s hard to build the staff necessary for extra child care spots. The legislature’s proposal would raise the reimbursement rate to 85% of the 2018 regional market cost up from 75% of the 2016 rate, where it has long been stuck.
“We lose our workforce to better jobs at Costco and In and Out Burger, nothing against Costco and In and Out Burger, but people make financial choices for their families,” said McCarty, chairman of the Assembly Budget Subcommittee on Education Funding. “And if the most important job in society is taking care of our kids and we don’t pay that workforce a living wage, it’s not rocket science to see what happens.”
Though the child care sector has long struggled with steep operating costs, the pandemic has worsened matters. Almost half of the state’s family child care providers haven’t been able to pay themselves and about 1 out of 5 missed a rent or mortgage payment, according to the Center for the Study of Child Care Employment. Bumping up the subsidies is key to creating a more equitable child care system, many providers say.
“The missing piece is increasing pay for providers like me,” said Rasiene Reece, a family child care provider from Victorville with 20 years of experience. “So we can stay open to support the families we serve and our own families. The time for action on this missing piece is now. The child care system, which was already in crisis before the pandemic, is now on the verge of collapse.”
In the wake of the pandemic, as legions of women have dropped out of the workforce to tend to children, some say child care providers have emerged as the backbone of the state’s economic recovery.
“Child care is the only way many working parents can balance career success with family responsibilities, and it’s especially crucial to bringing women back into the workforce,” Reece said. “Child care providers are a critical piece of our state’s human infrastructure, yet our rates have not increased in years.”
Emerging from the pandemic with a fresh understanding of the structural weaknesses in the state’s child care system, hopes are high for rate reform as well as more child care slots in light of the state’s unprecedented windfall.
“This is a year for all of it to come through,” Leyva said, “If we say that our children are our future, this is the year to prove it to them and their families, with this budget, this year.”
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