Child Care Rate Reform & Immediate Down Payment #FixChildcareCA

For too long, children, families, and businesses have suffered because our state has failed to invest adequately in the child care system. There is now a plan in place, and you can help to make it a reality.

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Final Sign-Ons

CA Must Make A Multi-Year Commitment To Adopting Rate Reform And Provide An Immediate Down Payment To Address California’s Child Care Crisis

Dear Governor Newsom and State Legislators,

The undersigned organizations urge you to adopt an alternative methodology utilizing a cost-estimation model and multi-year transition plan to address the child care crisis and transform child care and early learning in California to ensure young children and families can thrive.

These plans were developed as a result of the work of the Rate and Quality Workgroup, established under AB 131, which culminated this past August in two comprehensive reports (linked here and here) summarizing their work that assessed the methodology for establishing rates and the existing quality standards for early care and education (ECE) programs. The workgroup recommended implementation in three stages:

Stage 1 – Increase reimbursement rates immediately while simultaneously obtaining federal approval for an alternative methodology for setting reimbursement rates.

Stage 2 – Implement a federally approved alternative methodology to set base rates that are informed by the cost of providing care services.

Stage 3 – Continuously evaluate the new alternative methodology and base rate and make appropriate changes and broader system investments.

In accordance with the recommendations, we, the undersigned, urge you to do the following:

  • Support and enact SB 380 (Limon), and AB 596 (Gómez Reyes), parallel bills which call for a multi-year commitment to adopt an alternative methodology using a cost estimation model and include a timeline for implementation for the actual cost of care based on program enrollment without charging families fees as outlined in the Rate and Quality Workgroup reports;
  • Provide a 25% increase to current rates to all subsidized child care and early learning providers for immediate relief;
  • Allocate all 20,000 child care spaces scheduled to be released in 2023-24. Thousands of families need access to child care TODAY, and if the state allocates funds by October of 2023, there should not be a delay in enrolling new families.

Without immediate action, more and more children will be left behind. There are currently hundreds of empty early childhood classrooms because providers cannot hire teachers to staff them due to low wages. These are child care slots that have been allocated for in the budget but will not be utilized because of the antiquated cost model and despite a huge need for child care. Parents and caregivers, particularly the most marginalized, are left to make increasingly difficult choices. Many must sacrifice family income or choose less safe or unstable care options, all of which increases overall family stress – something well understood by you and your Administration’s Roadmap for Resilience, which includes 95 mentions of the importance of quality child care settings in preventing lifelong negative impacts of ACEs on children and their families.

As your Administration has done the right thing to offer free transitional kindergarten services to all 4-years-olds, eliminating family fees for those in subsidized child care and early learning services is an equitable solution to ensure children from birth-to-age-12 are able to remain in care without additional financial burdens.  Failure to act leaves ECE providers, a predominantly women of color workforce, to accept poverty wages and go into debt, rather than ask their families to pay fees, when they can least afford it. California must do better.

Family child care and center-based child care programs are struggling to find qualified staff for the wages they can pay and are overwhelmed with the rising costs to keep their doors open. The US Department of Labor estimates over 100,000 workers have not returned to the child care workforce (NYTimes). In California, we are seeing dark classrooms in our center based child care programs as they are unable to recruit or retain workforce at the current reimbursement levels leaving parents without opportunities for child care for their children (KQED, Sac Observer, KCRA).

Inclusion of these key investments in the 2023-24 budget will signal to California parents, small businesses, and industry alike, that the Newsom Administration takes seriously the needs of working women and people who are raising children and respects the hard-working individuals of the child care industry who stepped up for California when it needed them most.

Without making this multi-year commitment to moving to a cost-estimation model with a critical down-payment in the budget now for a robust mixed delivery system, the economy will continue to be negatively impacted as workers cannot find safe, stable, and nurturing environments for their children so that they can participate in the workforce. Numerous business surveys cite child care problems as a top three workforce challenge. Robust child care and early learning are an integral part of a thriving California.

The Undersigned Organizations