1. FY 2012 Budget Update Policy and Fiscal Committee July 25, 2011

2. Overview: FY 12 Budget On July 8, 2011 the Governor signed the FY12 General Appropriation Acts (GAA) totaling $30.5B. The budget for EEC is $495M, which is $5.9M less than the House recommendation and $7.1M higher than the Senate version. Considering the economic realities of these times, EEC fared well in the FY12 budget. Layoffs, which would have been necessary under the Senate’s budget, will not be needed, impact on caseload is less severe than if the Senate caseload recommendation prevailed, and EEC will not have to further restrict already scarce administrative resources. 2

3. FY12 Budget History 3

4. FY12 Budget 3000-1000 Administrative Account Appropriation House: $11,683,491- Support our Admin maintenance needs, which include CBA increases, step increases, and anticipated lease increases. Senate: $11,104,990 - Severe administrative restrictions and potential staff reduction of 10 personnel. Senate budget does not include funding for the CBA the legislature passed last year or anticipated lease increases. Final FY12 Budget - $11,683,491: House recommendation prevailed enabling EEC to maintain services and support collective bargaining costs and other liabilities in FY12. Language House: Requires EEC to “issue a report by February 15, 2012 detailing the feasibility of centralizing the following responsibilities provided through item 3000-2000 in fiscal year 2011 with the department: program coordination and support, voucher management, outreach to hard-to-reach populations, intake and eligibility services for families seeking financial assistance to enroll in early education and care programs, resource and referral for families with disabilities in child care programs, and walk-in services for homeless families.” Senate: Requires EEC to provide data to the proposed Caseload Forecasting Office. Final FY12 Budget: Both House and Senate language was included in the final budget. 4

5. FY12 Budget 3000-2000 Access Management Appropriation House: $5,933,862 - Funds most of the anticipated FY12 cost with the exception of the $60K needed to annualized cost to maintain COTS Waitlist system. Senate: $4,433,862 – Over a 25% reduction from the FY11 level. Final FY12 Budget - $5,933,862: House recommendation prevailed. Language The House strips most language away because it requires a report from EEC detailing EEC’s ability to take over many of the current CCR&R functions. The Senate recommends the same language that is in the FY11 GAA. Final FY12 Budget: Senate’s language prevailed, but EEC is still required, per admin language, to file a report in February 2012 on centralizing CCR&R functions into EEC admin. 5

6. FY12 Budget 3000-3050 Supportive Appropriation House: $77,448,576 Senate: $77,448,576 Final FY12 Budget - $77,448,576 Observation: Funded at $85,713,747 in FY11, we project to spend $75,075,870 by the end of FY11. Caseload is difficult to predict, but has recently been increasing. We expect to spend the full allocation in FY12. This is an entitlement account. Language No changes 6

7. FY12 Budget 3000-4050 TANF Related Child Care Appropriation House: $133,371,287 Senate: $132,458,313 Final FY12 Budget - $132,458,313 Observation: Funded at $127,358,313 in FY11, we project to spend $133,945,357 by the end of FY11. Even if caseload remains static, we will not have adequate funds. If caseload increases significantly, we will need supplemental funds in FY12. This is an entitlement account. Language No changes 7

8. FY12 Budget 3000-4060 Income Eligible Account Appropriation House: $237,397,940. This number would allow EEC to eventually open access in FY12 for children in need of services. Senate: $227,965,287. Senate’s level would force access to remain closed for all cases and allow attrition to make up the structural deficiency built into FY12’s budget. FY12 Final Budget - $232,897,940: The Conference Committee figure prevailed. EEC has constructed a plan to remain within the FY12 funding level which requires that access remain closed at least until January 2012 and that monthly expenditures be measured against the maximum expenditure threshold for that month. If expenditures are greater than expected, stringent actions will need to be taken. Language Minor difference which has no impact. 8

9. FY12 Budget 3000-5000 Grants to Head Start Appropriation House: $7,500,000 Senate: $7,500,000 FY12 Final Budget - $7,500,000 Language No changes. Comment: FY12 Grant awards have already been released. 9

10. FY12 Budget 3000-5075 UPK Appropriation House: $7,500,000 Senate: $7,500,000 FY12 Final Budget - $7,500,000 Language Minor word change, no impact. Comment: FY12 Grant awards are ready to be released. 10

11. Appropriation House: $750,000 Senate: $600,000 FY12 Final Budget - $750,000 Language No changes. Comment: FY12 Grant awards are ready to be released. 11 FY12 Budget 3000-6075 Mental Health

12. FY12 Budget 3000-7050 Services for Infants and Parents 12 Appropriation House  Consolidated the Quality Supports account into the Family Engagement item and level funded.  Segregated 3000-7050 (“Reach Out and Read”) into a separate line item (3000-7070) and funded it at $500K. (It was funded at $585K in FY11). The $500K was not backed out of the consolidated account. Senate  Did not consolidate the Quality and Family Engagement items.  Like the House, segregated 3000-7050 (“Reach Out and Read”) into a separate line item (3000-7070), but funded it at $800K. The $800K was backed out from the 3000-7050 account. FY12 Final Budget - $18,193,633: Combined the Quality Support and Family Support accounts into one new account, Services for Infants and Parents (3000-7050). The merger of the accounts and the allocation of funds to Reach Out and Read in its own appropriation resulted in reduction of $233,000 available to the programs funded in this account.

13. Programs Funded in this Account CFCE: The revised FY12 CFCE funding level is $13,615,343, a reduction of 6.2%. Professional Development: The revised funding level is $3,167,999, a reduction of 4% QRIS: In FY10 we set aside $4M for this critically important initiative; the set aside in FY11 dropped to $3.4M. We had hoped to fund QRIS in FY12 at $1.5M, but have dropped the FY12 funding level to $800,000 to divert more funds to CFCE and Professional Development. QRIS is important to our mission on many levels, not the least of which is helping to make us competitive to win funds (as much as $50M) in the Race to the Top Early Learning Challenge Grant competition. 13 FY12 Budget Services for Infants and Parents

14. Appropriation House: $500,000 Senate: $800,000 FY12 Final Budget - $800,000 Language Reach Out and Read established at its own appropriation. Funds distributed through Reach Out and Read shall be contingent upon a match of not less than $1 in private or corporate contributions for every $1 in state grant funding. Reach Out and Read shall issue a report to the department, house and senate committees on ways and means and the joint committee on education, no later than February 15, 2012, detailing program success in meeting measurable goals and benchmarks Comment: Funding for Reach Out and Read in FY11 was $585,000 from the Family Supports Account. Reach Out and Read has an increase of $215,000 in FY12. EEC will soon release a contract to Reach Out and Read. 14 FY12 Budget 3000-7070 Reach Out and Read

15. FY12 Budget New Caseload Forecasting Office (Outside Section 6) Effective July 1, 2011, there is created a central office that will project caseload for EEC, DTA, Medicaid, GIC, Housing, and all other entitlement programs. EEC is required to provide data to enable this central office to project caseload. The Commissioner does not have a seat on the board that governs the Office. 15