Background
California has a mixed child care and development delivery system, designed to provide parents the flexibility to select the type of subsidized care that works best for their family in either child care center or home settings. However, the state’s system for reimbursing center-based and home-based care is fragmented. Home-based child care providers who meet Title 22 standards, those who are exempt from licensure such as Family, Friend and Neighbor Providers, and some center-based programs are reimbursed using a Regional Market Rate (RMR) method, which accounts for geographic cost factors. State-contracted child care programs that must meet Title 5 and Title 22 standards are reimbursed at a flat Standard Reimbursement Rate (SRR), which does not account for geographic cost factors.
Pursuant to the Agreement reached between CCPU and the State of California, which was codified via Assembly Bill (AB) 131 (Chapter 116, Statutes of 2021), signed by the Governor on July 23, 2021, and ratified by CCPU on July 26, 2021, the State and CCPU have established a Joint Labor Management Committee (JLMC) to develop recommendations for a single reimbursement rate structure to present to the Department of Finance (DOF) no later than November 15, 2022. The CDSS, in consultation with CDE is responsible for convening a working group to assess the methodology for establishing reimbursement rates and existing quality standards for child care and development programs and preschool programs. The working group includes, but is not limited to, representatives from CCPU, teacher and administrator representatives of state-funded center based contractors, child care and development experts, parent representatives, a head start representative, an alternative payment program agency representative and representatives from the administration. The working group will provide recommendations relating to specified topics to the JLMC, the Department of Finance (DOF), and the Joint Legislative Budget Committee no later than August 15, 2022.
The CDSS is partnering with WestEd to lead and facilitate discussions with the working group and JLMC. WestEd will also support CDSS in overseeing data collection, data analysis, and in stakeholder engagement efforts to inform final recommendations for a single reimbursement rate structure.
To maximize program quality and stabilize California’s child care and development system, prior recommendations for rate reform have recognized that California needs a single, regionalized reimbursement rate structure that addresses the cost of providing high quality child care. These recommendations have highlighted that a regionalized rate system should achieve the following vision:
- Compensate all teachers and child care providers for the true cost of providing care by reimbursing them at rates that reflect the economic diversity of California,
- Recognize the costs of meeting varying quality standards and regulations, and
- Strengthen the ability of the state’s mixed delivery system to provide quality options
California Cost of Care Study 2023
To increase positive outcomes for children and families and early care and education providers, California will be setting child care subsidy reimbursement rates informed by the cost of care, moving away from market rates. The California Department of Social Services (CDSS) is working with Prenatal to Five Fiscal Strategies to design and implement an alternative methodology process.
All early care and education providers, including child care and development centers, family child care homes, tribal programs, and license-exempt family, friend, and neighbor providers are invited to complete an online survey and participate in a virtual input session to provide input into the cost study.
Survey
To access the survey, including to preview the questions to prepare any information you might need before you begin, click the link below.
https://www.prenatal5fiscal.org/california/survey
Input Sessions
To see the schedule and register for a virtual input session, click the link below:
https://www.prenatal5fiscal.org/california/input
If you have any questions about this study and want to connect with a member of the P5 Fiscal Strategies team, please either email or call via the details below:
Email: california@prenatal5fiscal.org
Call: 217- 469 - 5250