Governor’s Budget 2017 -18 Early Learning and Child Care BRIANNA BRUNS CA DEPARTMENT OF FINANCE
Economic Outlook Changing Times: General Fund revenues are not rising as quickly as projected - compared to 2016 Budget Act projections, SAL General Fund revenue estimates have decreased by $5.4 billion over a three year period (2015-16 to 2017-18) Lower personal income tax revenue – lack of growth in high wage earners Federal Uncertainty Prop. 98 continues its upward trend from Great Recession, however growth is declining Significant recent growth in Early Learning and Child Care programs is not sustainable in the long-term
Changes in Revenue Estimates
State Fiscal Pressures Rising pension and retiree healthcare costs Prop. 98 General Fund LCFF target growth Non-Prop. 98 General Fund and Other Funds Scheduled state cost increases for expanded Medi- Cal access Minimum wage increases Cost pressures related to housing costs, homelessness, infrastructure, immigration, etc.
Recent Early Learning and Child Care Policy Augmentations Since 2013-14, the state has invested the following in Early Learning and Child Care programs: $388.1 million Proposition 98 General Fund $447.5 million Non-98 General Fund Approximately 39,000 new slots These increases are attributable to: New preschool and child care slots Updates to the Regional Market Rate and Standard Reimbursement Rate Various quality programs including the QRIS Block Grant and other one-time quality investments
2017- 18 Governor’s Budget Proposals for Early Learning and Child Care Augmentations Full-year costs associated with the 2016 Budget Act, including: $42 million for RMR increases $24 million for 2,959 full-day State Preschool slots $37 million in total CalWORKs Stages 2-3 caseload adjustments Pause in the Multi-Year Deal 2016 Budget Act: The Administration and the Legislature agreed to rate augmentations of $317 million non-Prop. 98 General Fund and $110 million Prop. 98 General Fund by 2018-19 As of 2017- 18 Governor’s Budget, the state has made rate investments totaling $163.7 million non-Prop. 98 General Fund and $43.7 million Prop. 98 General Fund 2017-18 Governor's Budget: Pauses further rate augmentations in 2017-18 and extends the multi-year deal through 2019-20
2017-18 Proposed Early Learning and Child Care Budget
2017-18 Trailer Bill Proposals Increase Provider Flexibility Option to use electronic applications Allow children with exceptional needs whose families exceed income eligibility access to part-day State Preschool Allow state preschool programs flexibility in meeting minimum adult- to-student ratios and teacher education requirements, especially those with a Tier 4 or higher QRIS rating Increase Alignment Between Programs Align the state’s definition of homelessness with the federal McKinney Vento Act Eliminate licensing requirements for state preschool programs using facilities that meet transitional kindergarten facility standards Simplify process by which school districts can align program minutes for state preschool and transitional kindergarten students
Looking Forward to May Potential for changes to federal programs and funding Administration and Legislature engagement on the 2017-18 CCDF State Plan for quality expenditures CalWORKs child care caseload and cost-of- care updates Budget hearings, new legislation, stakeholder and legislator priorities
Contact Info Brianna Bruns Finance Budget Analyst, Early Learning and Child Care Department of Finance brianna.bruns@dof.ca.gov (916) 445-0328
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