County Child Care Pilots: Why Statewide Problems Require Statewide Solutions

What is a County Child Care Pilot?

Individual county child care subsidy plan pilot (“pilot”) legislation allows counties to vary statewide eligibility rules, family fees, reimbursement rates and other criteria governing child care operations in ways that the Education Code does not otherwise allow. Such experimentation is particularly attractive to “high cost” counties where families not earning enough to meet the high costs of living in the county are nevertheless found to have too much income to qualify under statewide eligibility rules, and where the high cost of providing care exceeds statewide reimbursement rates. While each county pilot has slight differences, the core features are to vary family eligibility and fee schedules, provider reimbursements and to allow funding flexibility in order to maximize efficient use of contract dollars.  Pilots were intended to provide flexibility without increasing costs, and so they must be revenue neutral for the state.  Counties are intended to, and in fact do, “use up” more of the child care dollars allocated to their community through the funding flexibility provision.

History of County Child Care Pilots

San Mateo County obtained permission to operate the first pilot under AB 1326 (Simitian) in 2003.  San Francisco joined soon after through SB 701 (Migden), passed in 2005.  A decade then passed before two additional counties, Alameda County and Santa Clara County, obtained authorization for pilots through AB 833 (Bonta) in 2015, and AB 2358 (Gordon) in 2016, respectively.  At the same time, the Legislature transformed the San Francisco and San Mateo pilots into a permanent waiver of statewide rules. Four bills this legislative session seek to establish pilots in an additional nine counties – AB 258 (Arambula)(Fresno), AB300 (Caballero)(Monterey, San Benito, Santa Cruz), AB377 (Frazier, Gonzalez Fletcher)(Solano, San Diego), and AB435 (Thurmond)(Contra Costa, Marin, Sonoma).

Recent Developments and Equity Concerns Regarding the Impact of Pilots

All of the current and proposed county child care pilot bills give the county the option of excluding current and former CalWORKs families from the pilot. In all newly approved pilots, either the county itself or CDE has acted to exclude CalWORKS families (and in the case of Alameda County, all parents using vouchers) from the benefits of the pilot. There are limits on the “flexibility” CDE grants pilot counties, but few limits to CDE’s exercise of discretion in approving or disapproving individual pilots, and CDE has been inconsistent on the right of CalWORKs families to participate in pilots.

Unless pilots contain an ironclad guarantee that CalWORKs Stage 2 and Stage 3 families are included, there will be a disparity between the child care available to families whose subsidy is paid by CalWORKs and families whose subsidy is paid for with other state funds. Child care providers may prefer to accept families who were never in CalWORKs because the reimbursement rates for child care will be higher, and the parents’ will benefit from longer, more stable eligibility periods.  Parents with  CalWORKS may find they have fewer good child care choices.

Further, there are many counties for which the pilot concept is not a viable approach, particularly large complex counties like Los Angeles where a pilot is impractical to administer, and small rural counties that do not have the infrastructure to administer a pilot.  State minimum wage increases impact eligibility and cost of care for all working families, regardless of whether the families once participated in CalWORKs, and regardless of their county of residence. Families who are excluded from the pilot programs receive a reduced benefit from participation in state child care programs.

A Statewide Solution Exists

Child Care Law Center supports:

  • statewide funding flexibility, that allows all counties to move funds between programs to maximize the efficient use of allocated program funds to better serve the children and families in their counties.
  • a basic floor of eligibility for all California families, an essential protection that AB60 provides.
  • a comprehensive re-examination of Standard Reimbursement Rates and Regional Market Rates.

Initiatives to operate county pilots are well-intentioned efforts to address chronic problems in the child care subsidy program and to maximize services to local families. But they do not address the outdated financial eligibility and reporting guidelines that are holding families back all across the state. Because the new minimum wage is statewide, the right solution is a statewide update of guidelines for every child in every county.