May 13, 2022

Dear ,

Early Care and Education Details in the Governor’s 2022-23 May Revise Budget Proposal

All week, questions have been raised ahead of Governor Gavin Newsom’s May Revise Budget proposal. These questions, given the economic and revenue outlook, include if the governor provides significant relief to Californian’s that need it the most, how to address the Gann Limit, and will the COVID relief packages continue? 

The governor’s office released some details about his budget package yesterday, ahead of his budget release today. The budget revise will feature $18 billion to address inflation relief measures, including tax refunds for vehicle owners and bonuses for health care workers. However, with all of these increased funds, there is very little that is new from the January proposal early care and education programs. The Governor’s budget falls short of both the Legislature’s Budget Priorities. 

Click here to view the press conference. Click here to view the budget summary, state preschool begins on page 23. Other child care programs begin on page 82.

Click here to view the CA Department of Social Services May Revise Numbers. 

Funding Changes in the May Revise:

• Extension of Family Fee Waivers - The May Revision includes $136 million one-time federal funds for CDSS and $21.3 million one-time General Fund for CDE to waive family fees for CSPP and childcare and development services from July 1, 2022 through June 30, 2023.
• Extension of Hold Harmless - The May Revision includes for 2022-23, allowing CSPP and CCTR contractors to receive full funding allocated to them pursuant to their state contracts, regardless of student attendance.
• Reimbursement for Authorized Hours of Care - The May Revision includes provisions to reimburse voucher-based child care providers for authorized hours of care, who otherwise would be reimbursed for actual hours of care, from July 1, 2022 through June 30, 2023.
• Cost of Living Adjustment (COLA) Updated - 6.56% COLA.
• Child Care and Development Infrastructure Grant Program Augmentation - The May Revision includes $200.5 million in 2022-23 for minor renovation and repair focused on child care deserts and low-income communities.
• Alternative Payment Program (APP) Capacity Grant - The May Revision includes $20 million General Fund to assist APPs in developing capacity to serve additional slot commitments.
• CalWORKs Grant Increase - The May Revision reflects an 11% increase to CalWORKs Maximum Aid Payment levels, which is estimated to cost $296.2 million in 2022-23. These increased grant costs are funded entirely by the Child Poverty and Family Supplemental Support Subaccount of the Local Revenue Fund.
• Local Assignment Option for Transitional Kindergarten Teachers - The May Revision allows the temporarily increase the pipeline of qualified transitional kindergarten teachers, allows teachers with preschool teaching permits who hold bachelor’s degrees that meet basic skills requirements and are enrolled in coursework leading to be assigned as the teacher of record in a credential to teach transitional kindergarten. This flexibility is proposed to sunset on June 30, 2026.

The May Revise continues the investments from the January Budget Proposal, which include:

• Child Care Slots - $823.7 million for 36,000 subsidized slots, a mix of direct contracting center and voucher spaces.
• Transitional Kindergarten
  • Maintains parental choice for children eligible for TK, they can remain in CSPP, Head Start and other subsidized program should it be the best interest for the family.
  • Continuation of the multi-year Transitional Kindergarten investment which will be phased in over 5-years. 2022-23, starts year two of the expansion.
    • TK eligible children will be expanded from children turning five between September to December 2 to September to February 2.
    • Adult to Child ratios change from 1:24 to 1:12, in 2023-24, they will be reduced to 1:10.
  • $200 million one-time Prop 98 funds for planning and implementation grants for LEAs and $100 million one-time General Fund for LEAs to train and increase the number of ECE educators.
• California State Preschool Program (CSPP)
  • $309 million, $197.8 million Prop 98 and $110.6 million General Fund, to increase CSPP adjustment factors for children with disabilities and dual language learners. These adjustment factors are intended to fund new CSPP requirements outlined below:
    • Programs must serve at least 10% of children with disabilities.
    • Provide additional supportive services for dual language learners.
  • CSPP eligibility will expand from 12-months to 24-months.
  • Children with an IEP will be categorically eligible for CSPP.
  • CSPP can serve 2-year-old children if all eligible 3- and 4-year-olds are served.
• Inclusive Early Education Expansion Program (IEEEP) - $500 million one-time General Funds for facility support for general education and special education students in inclusive classrooms.
• Rate Increases
  • $373 million to pay for a full year of rate increases as outlined in the final 2021-22 budget.
  • Negotiations continue to further rate reform. The report and recommendations are due no later than November 15, 2022. A second workgroup to assess methodology of rates will provide recommendations no later than August 15, 2022.
• Other Investments
  • $25 million to fund the Child Care Initiative Project through June 30, 2023 to address areas underserved by child care providers, increase child care slots and support providers who want to become licensed.
  • $10.6 million to fund the California Infant and Early Childhood Mental Health Consultation program through June 30, 2023, to support the mental health needs of children, families and child care providers. 

EveryChild California will provide a full analysis of the proposed 2022-2023 budget once all of the details of the budget from the Department of Finance are released. 

Join Us! EveryChild CA Analysis of the Gov's 2022-23 May Revise Budget Proposal

Join EveryChild CA for this annual virtual event designed to discuss the Governor's May Revise Proposal. Hear from the EveryChild CA Public Policy team to help you understand the impact of this proposal to your programs. Click here to register and learn more!

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For questions, contact EveryChild California at info@everychildca.org