Enriching and affordable child care should be available to all children and families, regardless of their income, mental or physical
needs, race, ethnicity, or language they speak.
The Challenge
California pays providers for delivering publicly-funded child care services to families, but policymakers have underpaid them for too long. By not increasing child care providers’ pay, California policymakers uphold discriminatory laws that exploit Black, Latine, and immigrant women.
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The Solution
Fortunately, starting in 2024, California is taking steps to change how it pays child care providers and do it more fairly, based on their actual costs.
- Until now, child care providers set their fees based on how much families can afford to pay. This amount does not cover the full cost of providing enriching care to our children. The state then set a percentage of that fee to “reimburse” child care providers who care for children in families with lower incomes.
- The State and CCPU agreed in 2023 to a new way to pay child care providers known as a “cost-based formula.” This way is fairer because it is based on their full costs, like providers’ time, materials, rent/mortgage, etc. – all the costs associated with running an enriching child care program for California’s diverse children.
- This new method to pay providers promises to be fairer than the current method, which lacks transparency.
- The State Legislature may decide to fund less than 100% of the new minimum. The State Budget Process will determine how much funding is available for the new minimum and enhanced payments.
Fair pay would mean that child care providers can cover their costs and take home a living wage, resulting in stability and growth for themselves and the children in their care.
California State Budget Act 2024 Signed by Governor Newsom
Child care funding decisions affect all of us – from families who depend on it, to providers who nurture the next generation, and the children who rely on care to learn and grow.
On June 22nd, the Governor, Senate, and Assembly reached an agreement on the language for FY 2024-25 California State Budget. Governor Newsom signed the Budget Act of 2024 and related Budget Junior bills and trailer bills in time for the fiscal year starting July 1, 2024.
What’s in the Budget?
Key highlights in the budget include:
- A committed intent to release 11,000 spaces this fiscal year, and issue the remaining 88,000 of the promised 206,800 child care spaces by 2028-2029.
- A plan to set new subsidy payment rates based on the alternative methodology by July 1, 2025. This plan also ensures that future subsidy payments will not be less than the amount providers currently receive.
- Continued funding for CalWORKs Expanded Subsidized Employment, Home Visiting, and Mental Health programs.
- Continued funding of child care spaces in the Emergency Child Care Bridge Program for Foster Children.
- Permission for California State Preschool Programs to now serve two-year-old children until 2027.
Our commitment to protecting child care providers and California’s families made an enormous impact. Because of our collective advocacy, California will continue to fund necessary programs and right the historical wrongs of racist child care policies.
What’s Next?
The Budget Act of 2024 and child care trailer bill language have been passed. Check back here for updates and our comprehensive Budget Round Up in August.
The Legislature Responds to Governor Newsom’s May Budget Revision 5/30/24
Three weeks ago, Governor Newsom released his May Revision to the State Budget. In response, the State Legislature presented their response to the Governor’s proposed Budget this week. On Thursday, May 30 the State Assembly Budget Committee and State Senate Budget Subcommittee on Health and Human Services held hearings to engage with advocates, hold space for public comments, and vote on the budget plan that will be sent to the Governor.
In response to the Governor’s proposed cuts, the Legislature proposed:
- A two-year pause, rather than the Governor’s proposed indefinite pause, on expansion of the child care spaces with a trailer bill specifying the plan to reach 200,000 spaces by 2028.
- A restoration of 11,000 spaces that were already awarded in Spring 2024 and a request for a trailer bill to streamline the space expansion application process for direct-contract providers.
- A rejection of both the Governor’s proposed cuts to the Emergency Child Care Bridge Program for Foster Children and CalWORKs
- A request for more reporting from the Department of Social Services regarding the alternative methodology for rate reform.
- Lowering the California State Preschool Program child age eligibility to allow children from 24-36 months.
- Creating a reversion account for all child care and general fund preschool programs
- Adopting the Governor’s proposal to eliminate the policy that would have required state preschool programs to serve at least 10% students with disabilities by 2026, and instead keeping the requirement at 5%.
What Happens Next?
The Legislature will now meet to discuss and vote on the budget committees’ suggestions. If passed, the budget will go to the Governor on June 15. The budget must be finalized by Governor Newsom on July 1, 2024.
Governor Newsom’s May Budget Revision Proposes Major Cuts for 2024-2025 Fiscal Year 5/16/24
This week the Senate and Assembly Budget Subcommittees met to discuss Governor Newsom’s May Revision to the State Budget. Both committees expressed concern, frustration, and confusion regarding the Governor’s suggested cuts and delays. Both houses raised questions over:
- The delay in the promised addition of 200,000 child care spaces by FY 2026-27.
- The state has only released 119,00 of these spaces, leaving 81,000 children on waiting lists.
- The clawback of 27,000 child care spaces authorized in previous budgets.
- The 1,700 children who won’t have child care due to the reduction in funding for Emergency Child Care Bridge vouchers for children in foster care.
- The lack of a timeline for the implementation of the alternative methodology that ensures fair pay for child care providers.
- The dramatic cuts to various CalWORKs programs that offer services to new mothers, people with mental health needs, and families seeking work.
- Child care providers being unfairly taxed on the infrastructure grants they received during Covid.
The Assembly and Senate budget committee members were clear they did not support a budget that is balanced on the backs of those with the least resources and they are ready to fight for a budget that reflects California’s values.
The Legislature must send their budget to the Governor by June 15. While lawmakers meet this week in the Senate and Assembly, we will continue to advocate for child care spaces for those on the waitlists, and fair pay for child care providers.
Fair Pay Today Update 4/29/24
The state budget is the most important legislation for creating an equitable society where families have the child care they need and child care providers are paid fairly for their hard work and dedication to our children.
On Wednesday April 24 and Thursday April 25, the State Assembly and Senate held hearings to discuss the California State Budget and, among other things, the money allocated to child care services. Bringing together representatives from the California Departments of Finance, Education, and Social Services, alongside voices from Child Care Providers United and the Legislative Analyst’s office, these hearings aimed to chart the course for implementing a groundbreaking single rate structure, ensuring equitable compensation for child care providers.
Advocates appealed to the budget committees, underscoring the urgent need to swiftly enact the new single rate pay system. They spotlighted the escalating financial strains burdening child care providers, which are propelling many talented individuals away from the profession.
During the hearings, one noticeable hurdle emerged: due to a lack of pertinent information provided by the state, the union felt unable to engage in meaningful negotiation and limited in their ability to advocate effectively for their members. The union is seeking precise details regarding the dollar amounts attached to the elements used to determine the single rate pay structure, and for a clear timeline to be inserted into the law itself in order to guarantee sufficient funding and commitment to the roll out as soon as possible.
Across the board, stakeholders echoed a consensus: the guidelines given by the governor’s office lacked the requisite clarity. However, a glimmer of hope emerges with the imminent release of the Budget Revise for 2024-2025 on May 14th. This forthcoming document promises to outline the state’s priorities, policies, and enduring investments for the following fiscal year.
This sets a pivotal timeline in motion. By July 1st, the California Department of Social Services must give their implementation plan to the Federal government. Should all proceed as envisioned, approval of the budget in the fall will pave the way for crucial negotiations between Child Care Providers United and the legislature. These negotiations hold the promise of establishing fair rates, vital for ensuring California’s child care providers receive just compensation.
In essence, the hearings held on April 24th and 25th serve as foundational conversations, laying the groundwork for forthcoming budget negotiations and collective bargaining endeavors. The aspiration? A finalized budget that not only dignifies child care providers with fair wages but also empowers California communities to flourish.
Fair Pay Today Update 3/29/24
Child Care Providers United and California Department of Social Services have announced these elements will be included in the cost-based formula to create a new minimum payment:
- Ratio of adults to children
- Number of Staff
- Wages
- Mandatory expenses for staff, like Medicare and Social Security
- Discretionary paid time off , like sick time and vacation
- Discretionary health and employer-paid health
- Training and planning time
- Supports for learners, inclusion of children with disabilities, and language
- Family engagement activities
- Child development items like educational materials and assessment tools
- Overhead costs, like office help, rent or mortgage, insurance, maintenance, utilities, supplies, and operating reserve
Cost-based formula for enhanced payment rates will include these elements:
- Care on evenings or weekends
- Inclusion supports
- Transportation of children
View full explanation and definitions here at CDSS.
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Paying child care providers a fair wage makes all our communities stronger.
