Individualized Child Care Subsidy Pilots San Mateo, San Francisco and Alameda Counties

Panel Participants Nirmala Dillman, San Mateo Graham Dobson, San Francisco Angie Garling, Alameda Peggy O’Brien-Strain, Mission Analytics Group Kira Gunther, Mission Analytics Group

Overview 1.Reasons for the Pilots 2.Legislative Background and Limitations 3.Changes for Providers and Families 4.Current Status of Pilots

Reasons for the Pilots

Exploring solutions to a “one-size-fits-all” state subsidy system: The Pilots seek to demonstrate the effect of local control and flexibility to meet the goals of family self-sufficiency and to help stabilize a fragile subsidized early care and education infrastructure.

High cost counties find that: The uniform state family income eligibility cut-off does not reflect high costs of living. The uniform Standard Reimbursement Rate (SRR) does not reflect high costs of providing care. Eligibility rules create disincentives for families to increase earnings.

The Pilots seek to address two fundamental concerns: 1.Many families barely earning enough to meet the cost of living in high cost counties, though nevertheless are considered to have too high of an income to qualify for child care subsidies.

2.State reimbursement rates to direct service contractors are too low to cover true cost of care and contractors cannot utilize their full allocation of state and federal child care and child development funds. As a result, fewer children are served and subsidized early care and education spaces are lost to the county.

Legislative Background and Limitations

AB1326, SB701 and AB833: San Mateo’s Pilot was authorized by Assembly Bill 1326, passed in October 2003 and implemented in 2004/2005. San Francisco’s Pilot was authorized by Senate Bill 701, passed in September 2005 and implemented in 2005/2006. Alameda’s Pilot was authorized by Assembly Bill 833, passed in September 2015 and will be implemented in 2015/2016.

The bills authorize each county to develop and implement individualized county child care subsidy plans, but provide only limited flexibility…..

Limitations: 1.No family who would have been eligible under state rules can either become ineligible or be asked to pay higher family fees. 2.Provider participation is entirely voluntary. 3.The number of child days of enrollment across participating providers must increase overall from the base year. 4.There are no additional resources for the pilots – only unearned and unallocated funds from existing contracts and CDE-EESD funding streams may be used.

Changes for Providers and Families

Changes for participating providers: Subsidized families can earn higher incomes and still remain eligible. Families above the state income threshold pay higher family fees. The SRR increases. Contracts renegotiated to maximize the use of contracted funds across county.

Changes for subsidized families : Families can remain subsidized up to a higher income threshold. Creates greater continuity of care. Reduces costs for families above the current cutoff. Allows some transition to the full cost of care.

Increase in income limits for participation in subsidized care : Entrance requirements remain the same at 70% of “benchmarked” State Median Income – for a family of 4 is $3,908 Pilots allow families to stay in subsidized care up to 80% of 2010/11 current Federal DHHS State Median Income – for a family of 4 is $5,314

A new fee schedule for the transition range: Fee schedule in transition range from 70% to 80% aims to protect families from the actual cost of care so that families can remain in high quality care as long as possible. Families pay approximately 10% of income

A reallocation of funds across providers: Funds reallocated from contractors who are not fully earning to contractors who can increase enrollment, in order to ensure increase in overall child days of enrollment across contractors in the county. Voluntary temporary transfers (VTTs) began as part of SF and SM Pilots. Both temporary and permanent transfers facilitated between contractors in Pilot counties.

Higher reimbursement rates for participating contractors: Pilot contract terms provide higher reimbursement rates. CountyContractSRRPilot Rate San Mateo CSPP CCTR $38.53 $38.29 $41.60 $41.35 San Francisco CSPP CCTR $38.53 $38.29 $41.05 $40.79

Reimbursement rates are set as high as possible given: Only existing resources The sum of the Maximum Reimbursable Amounts across participating providers plus Estimated parent fees Existing or target child days of enrollment $/cde ≈ Pilot Reimbursement Rate

Current Status of Pilots

Sunset Repeals: Both San Francisco and San Mateo Pilots had their sunset dates repealed through trailer bill language in September The components of these Pilots now remain indefinitely. Alameda Pilot was approved for 5 years, until June 30, 2021.

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