Child Care Funding Recommendations for California Budget 2017-2018

Child Care Funding in the California Budget

California raised the minimum wage so that people are paid fairly for their work, but the extra 50 cents an hour has very real consequences for parents, child care businesses, and the economy.

As the Legislature debates the California State Budget for 2017-2018, it should consider the following challenges and solutions to align child care policy with the new minimum wage.

The Challenge

  1. Parents lose affordable child care. Because income guidelines are outdated, many parents who earn the new minimum wage will no longer qualify for affordable child care if they work full time. Many low-income families have no stable child care. Eighty-percent of eligible families do not have publically-funded child care and will see their child care costs rise.
  2. Experienced child care providers look for other work. State reimbursement rates constrain pay in publically-funded child care, preschool, and after-school programs. When minimum wage laws increase the pay for entry-level staff, frozen rates create an unfair pay differential for experienced staff. This forces experienced child care professionals to leave for jobs with higher pay.
  3. Child care businesses can’t make a profit and may close. Child care providers, a majority of them women of color, work very hard, often for far less than $15 per hour. Child care centers and homes consistently express a desire to pay $15 or more per hour, but know that many families paying out of pocket could not cover the costs of their doing so.

The Solution: Proposals for Budget Year 2017–18

  1. Update eligibility guidelines to keep up with minimum wage increases
  2. Align child care provider reimbursement rates and minimum wage increases
  3. Make child care funding more flexible and predictable to allow contracted programs to budget for wage increases
  4. Use existing and projected resources to pay for these proposals
  5. Produce cost estimates to support implementation of these proposals

Read the Full Report of Recommendations endorsed by the Minimum Wage Task Force of the State Advisory Council on Early Learning.