May 25, 2021
RE: Recommendations for Child Care in the California State Budget
Dear Governor Newsom and Legislative Leaders,
Our communities work when children are cared for. We are disappointed that the May Revision includes no child care subsidy rate increases and makes minimal commitment to ongoing support for affordable child care. While child care is considered absolutely essential to our economic recovery, the majority of people who perform this work make poverty-level wages. Many with privilege built their own wealth during the pandemic while benefiting from the critical work of child care providers, mainly women of color, who kept our children healthy and safe and risked their personal and family’s health in doing so. Continuing to pay child care providers dismally low wages when the income disparity has grown substantially during this time upholds systemic racism.
We appreciate that the May Revision includes 100,000 child care spaces and continues the “hold harmless” policy of reimbursing child care providers paid with subsidies based on enrollment, not attendance, through June 30, 2022. Increasing provider rates, the number of ongoing child care spaces to 200,000, extending the waiver of family fees, and distributing the federal child care stabilization grants immediately are also crucial. With a healthy surplus of $76 billion in state revenues and over $5.1 billion in federal child care relief money, we respectfully urge the Administration and Legislature to devise a budget that commits to long-term building and sustainability of equity for child care for providers and families.
The following priorities are part of the broader, unified recommendations of the ECE Coalition:
1. Increase child care provider rates - $1 billion: Child care providers must be paid justly. We urge the Governor to come to the collective bargaining table and negotiate a rate increase that adopts the 2018 Regional Market Rate (RMR) survey for all family child care providers paid at the 85 percentile of the State Median Income (SMI). Adopting the 2018 RMR survey will also raise the rate for family, friend, and neighbor providers. All providers need a living wage. We request the same rate increase for other providers paid with vouchers and Title 5 direct contracts, all to be included in the July 1 budget.
2. Increase the number of ongoing child care spaces to 200,000: Child care keeps children thriving and is essential for families to build wealth. We ask for 200,000 ongoing child care spaces in family child care homes, Title 5 programs, contracted centers, child care centers, before- and after-care programs, and with family, friends, and neighbors, while continuing to waive family fees for all families until September 30, 2024.
3. Waive family fees for all families through September 30, 2024 - $325 million: Waiving family fees for all families enrolled in publicly-funded child care and preschool until September 30, 2024 would immediately put money back into the pockets of families and child care providers, especially from communities of color, hit hardest by the pandemic. Family child care providers and direct-contracting centers must be paid in-full and should not be expected to absorb their loss in family fees. The number of child care spaces also must not be compromised.
4. Obligate and expend the federal child care stabilization grants - $2.3 billion: California received $2.3 billion for Child Care Stabilization Grants pursuant to the American Rescue Plan on April 15, 2021.[1] We did not see these grants named in the May Revise. Guidance from the Administration for Children and Families mandates these funds be distributed as grants to child care programs and providers – both private and publicly-funded – to pay for pandemic and post-pandemic expenses.[2] These grants will support providers who closed permanently or temporarily during the pandemic to reopen and will help cover costs they incurred as a result of the pandemic.[3]Please see the attached suggested budget language that Child Care Law drafted to implement the child care stabilization grants and that meet the federal law requirements.
We are at a pivotal moment where California can create a just and seamless early care and education system for children from the beginning of life to preschool and beyond. Thank you for your consideration of our child care budget requests that will open opportunities for children, families, and communities.
Sincerely,
Laurie Furstenfeld
Co-Director of Legal & Legislative Advocacy
Child Care Law Center
Mary Ignatius
Statewide Organizer
Parent Voices CA
Kim Rosenberger
Government Relations Advocate
SEIU California/Child Care Providers United (CCPU)
Beverly Yu
State Government Affairs Director
UDW AFSCME Local 3930/Child Care Providers United (CCPU)
Nina Buthee
Executive Director
EveryChild CA
Federal Child Care Stabilization Grants
Of the more than $3.7 billion in American Rescue Plan Act (ARP) child care funding that came to California in April 2021, about $2.3 billion must be used for a stabilization grant program for child care providers. This funding must comply with requirements and guidelines in federal law and recent federal guidance. Below we outline the main requirements that govern the use of these stabilization grant funds (though this is not exhaustive).
The ARP Law
● At least 90% of this funding must go out the door as grants.
● Grants are for both providers paid with and without public funds (private pay and subsidies)
● The state must offer grants through an application posted on their website, and they must accept and process applications on a rolling basis.
● Grant amounts must be based on a provider’s current stated operating expenses.
● Grants can cover both future and past expenses.
● States have to provide grants in advance of provider expenditures (unless providers are being reimbursed for past expenses).
● Grants must go toward one or more of the following costs: personnel; rent or other facilities; cleaning supplies, services, and training; equipment and supplies to respond to the pandemic; goods and services to maintain or resume services; mental health supports.
● For the duration of their grant, providers cannot reduce pay or benefits for any employee; must provide relief from fees for families (to the extent possible); and, when open and operating, must comply with applicable health and safety requirements.
● States must expend this money no later than September 30, 2023 and must use federal funds to supplement, not supplant, other public funds.
Federal Guidance Clarifications to the ARP Law
● Grant applications should not require extensive documentation. They should only require the information necessary to make grants and meet federal reporting requirements.
● Applications should be available in multiple languages and written in plain language.
● States must have a process in place for providers to affirm and state their operating expenses, and it is recommended that states accept a variety of documentation.
● States are encouraged to provide grants for at least 6 months.
● Grant funds cannot be used for construction or major renovations.
● States should collect certain information and be prepared to report on it quarterly to the federal government.
● States are strongly encouraged to use these funds quickly.
Proposed Budget Language to Implement the Federal Child Care Stabilization Grants
(the highlighted sections need further input or clarification)
SECTION 2. Section 8228 is added to the Education Code to read:
8228. (a) Upon an appropriation in the annual Budget Act or another act for the express purpose of implementing child care stabilization grants pursuant to Section 2202 of the American Rescue Plan Act of 2021 (P.L. 117-2), this section shall take effect for the use of those funds. The stabilization grant funds were awarded to the CCDF lead agency [we assume this will be the California Department of Social Services] on April 15, 2021 and are intended to be awarded simply and flexibly to quickly meet the individual needs of child care providers. The lead agency is encouraged to build the number of facilities offering non-standard hour care, infant and toddler care, child care in underserved areas, and child care that meets the needs of children with disabilities. This child care stabilization grant funding shall supplement, not supplant, other federal, state and local funds expended to provide child care services for eligible individuals.
(b) For the purposes of this section, the following definitions apply:
(1) “Eligible child care provider” includes a:
(a) Provider as defined under Section 1596.791 of the Health and Safety Code and operates a child care center as defined by Section 1596.76 of the Health and Safety Code and was licensed, registered, or regulated as of March 11, 2021;
(b) Provider as defined under Section 1596.791 of the Health and Safety Code and operates a licensed family child care home as defined by Section; 1596.78 of the Health and Safety Code and licensed, registered, or regulated as of March 11, 2021; or
(c) Legally licensed-exempt child care provider as defined by Section 1596.792(d) & (f) [we need to ensure all the relevant FFN and license-exempt providers are included here] of the Health and Safety Code and meets requirements under Section 658P of the Child Care and Development Block Grant Act of 1990 (42 U.S.C 958n).
(2) “Child care stabilization grant” means any grant, stipend, or other payment made to an eligible child care provider funded in whole or in part by Section 2202 of the American Rescue Plan Act of 2021 (P.L. 117-2).
(3) “Department” means the California Department of Social Services.
(4) “High-need” means an eligible child care provider that meets one or more of the following conditions:
(A) The provider or the majority of the families in care are located in a zipcode where more than XX% of the population is below the poverty level, where such data is derived using the 5-year estimates of the official poverty measure from the most recent American Community Survey from the Census Bureau [other metrics could be explored here as well, such as LPC zip code priority report];
(B) The provider self-certifies that they are receiving benefits or assistance under the Supplemental Nutrition Assistance Program, the Temporary Assistance for Needy Families Program, or the state Medicaid program [there may be other metrics here that target providers who might not be in a high-poverty census tract, but might still be enrolled in a public benefits program];
(C) The entirety or majority of children served by the provider are infants and toddlers.
(D) The provider cares for a child or children with disabilities.
(5) “Business license” has the same meaning as in Section 1597.45 of the California Health and Safety Code.
(c) The Department must establish a simple application form and portal through which an eligible child care provider can apply to receive a child care stabilization grant.
(1) Such an application must meet the following requirements:
(A) Available online and in paper form;
(B) Written in plain-language, simple, and available in multiple languages as required under the Dymally-Alatorre Bilingual Services Act of 1973 (Chapter 17.5 (commencing with Section 7290) of the Government Code), which includes, among alternative communication options, providing the same type of application materials in any non-English language spoken by a substantial number of members of the public whom the department serves as defined under Section 7296.2 of the Government Code;
(C) Accessible for persons with disabilities as required under Section 11135 of the Government Code, Section 7405 of the Government Code and Section 202 of the federal Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132); and
(D) Include the necessary self-certifications and information as outlined in subsection (d)(1).
(2) The Department shall not require an eligible family child care provider to demonstrate they have a business license as part of the application.
(d) An eligible child care provider must provide the following information through a self-certification by checking a box on the child care stabilization grant application form that includes the following:
(1) As of the date of the application, the eligible child care provider is either--
(A) Open and available to provide child care services; or
(B) Closed due to:
(i) Public health;
(ii) Financial hardship; or
(iii) Other reasons related to the COVID-19 public health emergency.
(2) Whether the provider operates the program for which it is applying is a:
(A) Child Care Center as defined by Section 1596.76 of the Health and Safety Code;
(B) Family child care home as defined by Section 1596.78 of the Health and Safety Code ; or
(C) Legally licensed-exempt child care as defined by Section 1596.792(d) & (f)[need to include all family, friend and neighbor and other license-exempt care that makes sense] of the Health and Safety Code and meets requirements under Section 658P of the Child Care and Development Block Grant Act of 1990 (42 U.S.C 958n).
(3) Once the provider is open and available to provide services, the provider will implement policies in line with guidance from corresponding State, Tribal, and local authorities, and in accordance with State, Tribal, and local orders and, to the extent possible, implement policies in line with guidance from the Centers for Disease Control and Prevention for the duration of the grant;
(4) For each employee, including lead teachers, aides, and staff that are employed by the child care provider to work in transportation, food preparation, and any other staff that the provider employs, the provider will continue to pay the employee’s full compensation, including any benefits, as of the date of submission of the grant application and will not take any action to reduce employee compensation for the duration of the grant. The provider will not involuntary furlough any employee employed on the date of the submission of the grant, for the duration of the grant.
(a) However, nothing in this section shall be construed to prevent a provider from permanently ending the employment of staff due to [describe situations here. Waiting for federal guidance on this language].
(b) In the event that the provider must fire staff as specified in (a), the provider must report the changes in operating expenses accordingly and the state may adjust the grant amount to reflect these staffing changes.
(5) The provider will provide relief from tuition, family fees, copayments, and other fees for enrolled families, to the extent possible;
(6) The provider will use the grant funds for one or more of the following allowable purposes and shall indicate via a check box which purpose or purposes the provider will use funding to cover:
(A) Personnel costs, including payroll and salaries or similar compensation for a provider (including a sole proprietor) or employee (including independent contractor), employee benefits, premium pay, or other costs for employee recruitment and retention;
(B) Rent (including rent under a lease agreement) or payment on any mortgage obligation, utilities, facility maintenance or improvements, or insurance;
(C) Personal protective equipment, cleaning and sanitization supplies and services, or training and professional development related to health and safety practices;
(D) Purchase of or updates to equipment and supplies to respond to the COVID-19 public health emergency;
(E) Goods and services necessary for the operation of the child care program, or
(F) Mental health supports for children and employees and providers.
(7) The provider will use grant funding on allowable use(s) outlined in subsection (5) to:
(A) Cover current or future costs;
(B) Pay for costs already incurred; or
(C) Both subsection(7) (A) and (B).
(8) Whether the provider meets the definition of “high-need” in subsection (b)(4);
(9) The following information about the provider is required to determine payment and inform equitable grant-making:
(A) Provider’s name, mailing address, address of program, if different from the mailing address, and zip code;
(B) Race and ethnicity of child care center director or family child care licensee;
(C) Gender of child care center director or family child care licensee;
(10) All information given by the provider in the application is truthful, accurate, and complete as of the date of the application to the best to the provider’s knowledge.
(e) The Department shall not require providers to provide additional detail about how the funding will be used beyond what is specified in subsection (d).[further federal guidance will be released soon regarding minimal documentation requirements This section can be adjusted accordingly, if need-be].
(f) Grant amounts for funded applications for eligible child care providers will vary depending on the capacity of the provider and whether the provider is high-need, as defined in (b)(4).
(1) [INSERT BASE/CATEGORY RANGES FOR BASES]
(2) The provider’s amount requested shall be based on the provider’s current operating expenses, including costs associated with providing or preparing to provide child care services during the COVID-19 pandemic, and to the extent practicable, cover sufficient operating expenses to ensure continuous operations for the intended period of the subgrant.
(3) Providers who self-certify as “high-need” will receive an additional X% on top of their base allocation.
(g) In order to ensure timely distribution of child care stabilization grants to eligible child care providers, the Department must:
(1) Establish the application in subsection (c) by July 1, 2021;
(2) Widely publicize the availability of grant funding across the state through various modalities, including but not limited to, online, public service announcements, and through organizations that represent child care providers, staff, or teachers; First 5 California organizations; Child Care Resource and Referral Agencies; unions, and other community-based organizations. The [lead agency] is strongly encouraged to partner with culturally relevant organizations and trusted messengers to publicize the grant funding;
(3) Provide technical assistance and plain language guidance to child care providers about how to apply for this funding. This technical assistance and plain language guidance shall be provided in multiple languages as required under the Dymally-Alatorre Bilingual Services Act of 1973 (Chapter 17.5 (commencing with Section 7290) of the Government Code), which includes, among alternative communication options, providing the same type of application materials in any non-English language spoken by a substantial number of members of the public whom the department serves as defined under Section 7296.2 of the Government Code.
(4) Approve all applications made by eligible child care providers that meet the requirements of this section using the allocation amounts specified in subsection (j) on a rolling basis until all funding is expended; and
(5) Begin funding applications for eligible child care providers received by July 15, 2021 no later than July 31, 2021 for the first round and continue doing so on a rolling basis such that: [Need to discuss with Lead Agency re feasibility of these timelines]
(a) An eligible child care provider who applies by day 15 of a month will receive funding no later than the last day of that month; and
(b) An eligible child care provider who applies between day 15 and the last day of the month will receive funding no later than day 15 of the following month.
(h) The [lead agency] may contract with intermediaries to ensure funds reach child care providers quickly. Agreements with intermediaries to administer the stabilization grants must meet Child Care Development Fund Requirements at 45 C.F.R. 98.11, including that [lead agency] shall retain overall responsibility for the administration of the program and administrative and implementation responsibilities undertaken by the intermediary must be governed by written agreements. Agreements with intermediaries must include a requirement for intermediaries to collect and report the necessary data outlined in subsection (k) on a regular basis.
(i) An eligible child care provider must expend 100% of its grant funds no later than September 15, 2023 and must report to the Department when 100% of grant funds have been expended.
(j) Notwithstanding any other provision of law, the Department may not place any additional reporting requirements on an eligible child care provider who receives a grant under this section.
(k) No later than October 15, 2021 and each quarter thereafter until all funds are expended, the Department must publish data on its website showing:
(1) The number of total applications, the number of pending applications and the number of funded applications since July 1, 2021, disaggregated by provider type as outlined in subsection (d)(2);
(2) The number of total applications, the number of pending applications, and the number of funded applications for the previous quarter, disaggregated by provider type, as outlined in subsection (d)(2);
(3) Zip codes, race, gender, and ethnicity of applicants, as outlined in subsection (d)(9)
(4) What applicants reported funds were to be used for as outlined in subsection (d)(6),
(5) Whether the provider is open and available to provide child care services or closed due to the COVID-19 public health emergency, and
(6) Any other data, information, or reporting that may be required by the Federal Office of Child Care related to the use of these funds.
(l) Per the “Information Memorandum ARP Act Child Care Stabilization Funds” issued by the Administration for Children and Families, Office of Child Care, the [lead agency] has until September 30, 2022 to obligate the American Rescue Plan Stabilization Grant funds. The [lead agency] has until September 30, 2023 to liquidate the funds.
[1] The Child Care Stabilization Grants have specific requirements states must follow. Office of Child Care (OCC) of Administration of Children and Families (ACF), FACT SHEET: Biden-Harris Administration Announces American Rescue Plan Funding to Rescue the Child Care Industry so the Economy Can Recover, Apr. 15, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/15/fact-sheet-biden-harris-administration-announces-american-rescue-plan-funding-to-rescue-the-child-care-industry-so-the-economy-can-recover (The White House announcement regarding disbursement of American Rescue plan funding for child care federal funds) (last visited May 18, 2021).
[2] U.S. Dep’t of Health & Human Services, Information Memorandum ARP Act Child Care Stabilization Funds, May 10, 2021, https://www.acf.hhs.gov/sites/default/files/documents/occ/CCDF-ACF-IM-2021-02.pdf (last visited May 12, 2021).
[3] National Association for the Education of Young Children (NAEYC), Am I Next? Sacrificing to Stay Open, Child Care Providers Face a Bleak Future Without Relief, https://www.naeyc.org/sites/default/files/globally-shared/downloads/PDFs/our-work/public-policy-advocacy/naeyc_policy_crisis_coronavirus_december_survey_data.pdf (last visited May 3, 2021).