Analysis of Child Care and Development Block Grant Funds for California from the FY2018 Omnibus Spending Bill

On March 22, 2018, Congress passed and the President signed a federal FY2018 budget bill that contained the largest-ever single year increase in federal Child Care and Development Block Grant (CCDBG) funding. This analysis provides information for advocates and stakeholders about the new funds’ impact on California child care budget and policy for state fiscal year 2018-2019.

1. California gets $253 million more in Child Care and Development Block Grant (CCDBG) funds in federal fiscal year 2018.

California will receive an additional $253 million in 2018 and most likely, at least that amount again in 2019.

Seventy percent of CCDBG funds must directly increase access to child care for low-income children. It is estimated that California’s share will help 11,000 children, primarily through spending to create more affordable child care spaces for low-income families.

CCDBG funds must also be used to fund the equal access, health and safety, quality improvement and other requirements contained in the CCDBG Reauthorization of 2014 (read our summary here).

New federal CCDBG discretionary funding increased by $2.37 billion in FY2018. Total CCDBG funding went from $5.4 billion in 2017 to $8.1 billion.

The breakdown of new spending for child care and early education in the FY2018 omnibus spending bill is:

CCDBG +$2.37 Billion
Head Start & Early Head Start +$610 Million
21st Century Learning Program +$20 Million for Before and After School Programs
IDEA Part B +$12.9 Million for Preschool Children with Special Needs
IDEA Part C +$11.4 Million for Infants and Toddlers with Special Needs
CCAMPIS +$35 Million for Child Care for Parents in Colleges and Universities

2. The new CCDBG funds are expected to start coming in the next two months, and deadlines are attached.

 There is no clear answer yet as to when California will begin to see this discretionary funding increase. It should be in the next two months because everyone is aware that we are halfway through federal fiscal year which ends September 30, 2018. It will most likely be released as a separate payment, and not part of the regular quarterly payments.  The state must commit or obligate its FY2018 allocations by September 2019, and spend the funds by September 2020. The state does not need to wait for specific federal instructions related to this money to develop its plan for how it will use the money.  It is important for stakeholders to urge California to develop its spending plan now to meet these tight time deadlines.

 3. CDE’s State Plan for 2019-2021 should detail how the increased funding will be used.

The California Department of Education (CDE), as the Lead Agency for CCDBG, will draft a State Plan for 2019-2021 to explain how it will spend all the CCDBG funds and meet the various CCDBG requirements. CDE had said it would publish the draft plan by March, but it has been delayed.  The Final State Plan is due on June 30, 2018.

You can watch here for an announcement about the issuance of the 2019-2021 draft State Plan.

Stakeholders and advocates will have 30 days from when the draft State Plan is published to comment on it. This is an important opportunity to shape the priorities for the allocation of existing and new funding to best serve California’s low-income children and their families.

4. CCDBG funds must supplement, not supplant, current state child care spending.

 The CCDBG Act mandates that the entire amount of CCDBG funds be used to supplement, not supplant, state general spending for child care for low-income families. It will be important to advocate for a California budget that fully realizes this mandate.

In addition, at least 70% of CCDBG funding that is remaining after the Quality Improvement expenditures described below, must be used to fund direct services.  This is done by spending the funds to create more spaces for children to receive affordable child care.

5. There are additional specific requirements for how this CCDBG increase must be spent, with some state flexibility.

Congress has stated its expectation that this increased funding will fully fund the costs of implementing the requirements contained in the 2014 CCDBG Reauthorization.  These requirements include:

  • Health & Safety requirements, including ongoing provider training in 10 mandatory subjects, and annual inspections for both licensed and license-exempt providers
  • Quality Improvements. In FY2018, no less than 8% of the CCDBG funds must be spent on quality improvements. In addition, no less than 3% must specifically target quality improvements to infant and toddler care. (This is the same percentage requirement for existing CCDBG funds).
  • Reimbursement rate structure that is based on a current Regional Market Rate survey and insures equal access of families to quality child care. The benchmark that is used to measure equal access is that payment rates are set at least at the 75th percentile of child care in the regional market, based on that current survey.
  • Family Eligibility Improvements to ensure continuous care and stability of families and providers.
  • Promote Parent Engagement through a consumer education website.

California adopted the new family eligibility requirements in 2017, and we have updated our market rate survey and increased rates for many child care providers.  Where California has the most work to do is in the areas of establishing ongoing provider training and annual health and safety inspections.

The 2014 reauthorization also included an emphasis on supply-building, especially of providers who serve infants and toddlers, children in need of non-traditional hours of care, children in high poverty areas, and children with disabilities.  With this growth in CCDBG funding, comes increased funding for quality improvement initiatives that can increase the supply of child care, especially for those targeted children.

6. The FY2018 increase establishes a new base level and is not one-time funding.

This increase sets a new base level of program funding.  While Congress always has the power to increase or decrease any discretionary spending, the broad bipartisan support is a strong foundation to help protect it in future years.

More background information on the requirements of the CCDBG Reauthorization Act of 2014 are available in our analysis, here. For a specific list of advocates’ recommendations and priorities by topic, please visit our CCDBG Advocacy page.

 

April 11, 2018