Assembly Budget Subcommittee No. 2 on Education Finance

Good morning. We will get going here. I know we have a long agenda. We'll have everybody here yet, but certainly need to get started and respect everyone's time. Today is our sub two budget Subcommitee Education Finance hearing on early education always one of the most important hearings that we focus on in the Budget Committee in the assembly. Early ed is so much of a difference maker for our kids and our families throughout California and always been a priority of our state budget process.

So we've had some major significant investments the last few years are going to be focusing on today. We, of course, launched universal preschool this year with universal transitional kindergarten, which will be focusing on implementation. We also shifted funding to expand the number of low income zero through three year olds to serving in our state preschool program and childcare. The win win. Hopefully we can get so many of our kids having multiple years of early learning programs in California.

We doubled the size of our childcare capacity with our subsidies, with 200,000 more slots through 2025-26. And finally, we've made progress on rate reform, and I'll notice progress because we are certainly not done and that probably is one of the biggest impediments. If we look at how much we've lost in our foregone COLAs the last 6-7 years, if we just had that, that would be rate reform in and of itself.

And lastly, we're very proud of what California and our care field has accomplished in the face of COVID and the pandemic. And we know that our work is not done. So we have a very long agenda today. We may have to take a break at noon, go to caucus, and come back for public comment after. We'll start. Issued with issue number one, universal traditional kindergarten implementation and the governor's January budget proposals.

We'll have a panel with the Learning Policy Alliance Finance, LAO, CDE, Office of School Construction, and San Diego Unified. Okay, let's start with our representative from the Learning Policy Institute, LPI.

Hanna Melnick, senior policy advisor. And you have some slides in your packets. So I am going to be talking today about universal preschool implementation and LEAs plans. These are findings from a forthcoming report from LPI and a little bit of context on the report. In August of 2022, the CDE administered a survey to LEAs serving TK students with their universal prekindergarten Planning and Implementation grant funds.

An LPI partnered with CDE to analyze data from over 1100 LEAs, including 429 charters who submitted their responses between August and September of 2022. So since LEAs very great landslides, we looked at all the data for LEAs, but then disaggregated results from the four largest school districts, LA, San Diego, Fresno and Long Beach. And so there's more information in your handout than what I'll present today, and you can find more in our report as well.

The first issue that we looked at is ETK how many leas plan to offer early admittance on transitional kindergarten? We know that the survey asked of the districts how many planned to offer ETK in 2022-23 meaning how many students would be able to participate in TK even if they weren't yet age eligible.

And we found that 39% of leas plan to offer ETK this year, expanding eligibility more rapidly than required, and that included Los Angeles, Fresno and Long Beach, with San Diego planning to start ETK in 23-24. So this is much more rapid expansion than what we were expecting, although we don't know how many children will be admitted early into TK if they're doing it by everyone who's four or certain children. We also looked at plans to offer full day TK.

This is really important because a longer school day benefits children and also families. We were pleased to see that about 79% of districts will be offering at least some full day options, 68% only full day, 11% both full and part day, and 21% of LEA is offering part day TK only. We also looked at how they plan to offer TK classes and specifically combinations. The data are a little bit more mixed here. 20% of leas plan offered standalone TK only.

About the same percentage plan to offer TK-K combination classes only, which is concerning because these classes have been shown to be less developmentally appropriate than standalone TK classes, and then 23% plan to offer both. The remaining districts just did not answer the question because of the way the survey was implemented. So do leas have enough qualified teachers? Obviously this is a critical question. There was a question that asked what strategies LEAs were planning to use to expand their workforce.

23% of LEAs reported they had enough multiple subject credentialed teachers and 21% reported having enough teachers who met TK apportionment requirements. Now this means that essentially four out of five districts do not have enough qualified TK teachers, meaning that we really need to continue with workforce expansion and none of the four largest districts reporting having enough teachers. We also looked at expanded learning. So where will LEAs offer expanded learning?

The majority plan to offer TK students expanded learning opportunities on their LEA site through aces or 21st century learning centers. Most LEAs only over half said this is the only option they're going to be using for expanded learning, whereas 21% plan to use a CSPP program and a smaller proportion plan to use expanded learning at a community site or with locally funded preschool. And the largest districts were kind of all over the map on the options that they were offering. We also looked at facilities.

Obviously this is really key right now to be considering, and over half of LEAs do expect to be updating their buildings or structures for young learners. We were somewhat surprised that only 27% said they do not have adequate classroom space for TK for their projected enrollment, and 27% on a separate item said they don't have facilities that meet TK standard or kindergarten standards. This did not include any of the largest four LEAs.

However, in the open response question that was optional facilities was the biggest issue that got raised, not having enough funding and needing technical assistance. We looked at CSPP plans because there's some concern that as TK expands that LEAs are going to reduce CSPP offerings, which would reduce access for three year olds. We were happily surprised to see only 2% of leas plan to reduce CSPP services.

Most plan to just maintain the status quo, but 11% have applied to start or increase their cspp offerings, and 17% said they would if more funding were appropriated. And finally, multilingual learners there was one question that asked how LEAs are going to be supporting their multilingual learners. This is critical for since language development in their early years is so important. Most districts plan to use English only instruction with home language support, 12% plan to use dual language programs, and 7% plan to use both.

And all of the four largest districts do plan to offer dual language programs. However, I do want to point to the fact that 17% had no plans to support English learners, and if you look at those districts more closely, over half of them have English learners, making up a third or more of their population. So this is definitely an area for further support.

So just to briefly sum up, basically, we found that many LEAs are planning to implement TK more rapidly than is required, including the largest four districts. But there is significant variation across LEAs, and then LEAs need significant support when it comes to facilities, staffing and professional development. So I'm happy to answer more questions in the panel.

Thank you. We'll certainly come back to you. Next we'll hear from Department of Finance.

Good morning. Jodi Lieberman with the Department of Finance. I will be giving an overview of the Governor's Budget proposals for transitional kindergarten. The Governor's Budget revises estimates for the first year investment of expanding transitional kindergarten from 614,000,000 to approximately 604,000,000 to expand access to all children turning five years old between September 2 and February 2. These revisions reflect updated enrollment and attendance data.

Building upon these first year investments, the budget includes 690,000,000 to implement the second year of transitional kindergarten expansion, which will increase access to the program to all children turning five years old between September 2 and April 2, which would approximately be 46,000 children. The budget also provides 165,000,000 to continue to support one additional staff person in the transitional kindergarten classroom serving these students.

The Proposition 98 guarantee was rebenched in fiscal year 2022-23 to include the universal transitional kindergarten and full implementation of universal transitional kindergarten as expected in fiscal year 2025-26. Additionally, this budget proposes several changes to transitional kindergarten. The first proposal would allow children who do not have their fifth birthday during the same school year to be eligible for early admittance. Thank you, for early admittance,

transitional kindergarten. currently, if a district wants to roll out TK faster than the current rollout in statute, law can be read to exclude birthdays after June 30 from being eligible that school year, even if the student turns five in July, which would be long before the start of the next school year. The change would allow a child who turns five not during the school year or not from July 1 to June 30 to be eligible.

So, for example, if a district wants to admit children up to five on July 30, they would not be eligible because they fall after that June 30 cutoff. According to the survey results from the countywide Planning and Capacity building program, 30% of districts plan to serve students whose birthday is after April 3 during the 2023-2024 school year. LPI just mentioned that 39% plan to serve ETK students during this school year.

The CDE estimates that 78,000 more children would be eligible if children with summer birthdays were able to be enrolled in the early admins. Transitional kindergarten while these children would not generate ADA districts can use their pre kindergarten planning and implementation grant programs to fund these children operating as operating costs and that could include the cost of serving early admittance transitional kindergarten children. The second proposal would be to increase qualifications for the second adult in the TK classroom.

Currently, there are very few requirements for the adult in the second. The second adult in a transitional kindergarten classroom and statute does not specify any qualifications. They must be 18 years or older, fingerprinted and an employee of the school district. The proposal would implement new qualifications for the second adult starting 2028-29 and the proposal attempts to provide broad pathways with an adequate time frame of five years to meet the requirements, which would be three years after the full implementation of universal transitional kindergarten.

The pathways would include to be a credentialed teacher, be working towards a teaching credential through any program that requires a clinical practicum, hold any level of a child development permit, or be a candidate for supervised practicum experience for a child development permit, or participate in specialized programs such as regional occupational programs with supervision. That concludes my remarks. I'm happy to take questions at the appropriate time.

Okay, thank you. LAO. Yes.

Good morning chair and members. Michelle Nguyen with the Department of Finance. I'll be brief with my remarks. Though the administration recognizes the importance of early education facilities, Governor's Budget faces a different revenue outlook from the last couple of governor's budgets that we've had, and the Governor's Budget proposed roughly 22.5 billion in a budget solution package for 2023-24 which included a variety of delays, reductions and fund shifts.

So with that as a backdrop, the California preschool, transitional kindergarten and full day kindergarten facilities grant program, which provides grants for the construction and renovation of classrooms for this program, was appropriated 490,000,000 one time General Fund in the 2021 Budget act, and the 2022 Budget act appropriated another 650,000,000 one time General Fund for the program, with 100 million appropriated in 22-23 and 550,000,000 intended to be appropriated in 2023-24.

Of these funds, roughly 225,000,000 were awarded to districts in fall 2022, and it's anticipated that the remaining approximately 360,000,000 will be awarded to districts by this fall 2023. Given the budget and revenue outlook, the Governor's Budget does delay that planned investment of 550,000,001 time General Fund from 2023-24 to 2024-25. The Governor's Budget maintains the overall funding commitment for this facilities program in recognition of the importance of providing facilities for early education.

But the Governor's Budget proposes the funding delay for this program given the overall architecture of the budget and the revenue outlook that was faced at the Governor's Budget. So with that, happy to address any questions that you may have.

Okay, thank you now LAO.

Good morning. Sara Cortez, Legislative Analyst Office. The Governor's Budget likely overestimates TK expansion based on data from the first principal apportionment. So this is data just released a few weeks ago. We estimate the state could lower ADA associated with expansion. By assuming a lower ADA, it will lower the amount the state revenges by 150,000,000 in 22-23 and 200 million in 23-24 compared to the Governor's Budget, so lowering the amount state revenges effectively frees up nonproposition 98 General Fund.

A lower ADA would also result in Proposition 98 General Fund savings associated with maintaining the cost of the one adult for every 12 students. We estimate a lower ADA results in roughly 80 million in savings in 22-23 and 110,000,000 in 23-24. With regard to delaying the facility funding and maintaining current staffing ratios, these seem reasonable given the state's budget problem, but the policy rationale also seems reasonable for these proposals.

When we first started TK expansion conversations, the main barriers that were elevated were facility issues and workforce issues. Based on the reports that submitted as part of the planning implementation grants that were just described to you, 75% of school districts report having adequate space to meet projected enrollment of TK students, and the question was specifically about projected enrollment through 25-26. So, based on these reports, facility issues do not appear to be as large of a barrier to implementation as we initially thought.

However, since augmentations for the facility programs have been oversubscribed, the Legislature could provide some amount of funds or reevaluate next year based on the state's budget condition. The story is quite a bit different on the workforce side. Only 23% of school districts report having enough multiple subject teaching credential holders to meet the need of TK expansion. Therefore, keeping the TK staffing ratio at current levels helps avoid further workforce issues.

We also recommend rejecting additional staffing requirements proposed in light of the staffing challenges, and that concludes my remarks, but I'm happy to take questions at the appropriate time.

Okay, thank you. Next we'll hear from CDE.

Good morning and thank you chair and members. Sarah Neville Morgan on behalf of State Superintendent of Public Instruction Tony Thurmond. Universal access to TK, along with targeted universal access for three and fours to our California State preschool program, are key to delivering on the universal pre K promise to provide all children with a strong and early start to education and support equitable opportunities for school readiness through joyful, developmentally informed, rigorous, and inclusive pre K programs.

We appreciate the administration's commitment to appropriating funding for the next year of expansion, which will support TK enrollment for any child turning five between September 2 and April 2. The increase in availability of TK will support hundreds of thousands of families across the state and has already started to help with access to high quality preK. When we look at 2021-22 data, TK was serving over 75,000 children and about 63% of those eligible, while kindergarten served 81%.

While we don't yet have enrollment data for the current school year, average daily attendance data shows TK increased by about 30,000 children, with nearly 92,000 in fall 2022, up from just over 61,000 in fall 2021. To assist with implementation, the CDE has partnered with numerous organizations and released extensive guidance, as well as an updated UPK or universal pre kindergarten planning and implementation template for our local education agencies and has held numerous webinars and technical assistance sessions.

We also have developed and released communication materials on UPK for local implementers and most recently just released the ones for families so that families can understand the benefits of UPK and the different options, not just TK, but the variety out there to meet their needs. So how is this all going from the 500 million you've invested in for the UPK planning and implementation or PNI grants?

LEAs have been using these funds associated with creating or expanding both TK and CSPP and to strengthen their and establish partnerships with other providers of PrEK within the LEA. Additionally, Hanna Melnick from LPI shared some of the useful data that we've been able to obtain from the surveys that we released to our UPK planning implementation grantees. I really want to thank LPI for helping us analyze all of that, in addition to what Hanna was able to share.

Just highlighting that 60% of districts and charters reported they plan on offering TK at all sites so that will be accessible in the neighborhoods for families and parents to access. As LPI mentioned, the majority of districts also plan to expand faster than required, and we found it was slightly higher for smaller districts along with those four largest districts.

In light of this, we think the governor's proposal to expand ETK to include summer birthdays is a reasonable approach since it will not cost the state any additional funds and also gives districts additional flexibility to meet their implementation needs. Additionally, school districts and charter schools have really reported extensive parent engagement as part of their UPK planning and implementation.

In addition, we have planning with the 18.3 million you invested last year in the UPK mixed delivery grant overall for those grantees, they're going to local childcare planning councils, which really fits with the LPC role in the county to address the care needs. We also have two resource and referral care agencies acting as grantees. Several of our counties have chosen to create consortiums and will submit a regional plan for consideration to those multiple county offices of education in that area next year.

We'll be able to come back and share some of the data that we've received from those funds. You may also have been aware that workforce is another ongoing need. While many of our LEAs have begun their work to support teachers to meet requirements, many more teachers will be needed by the time UTK is fully implemented in 2025-26.

According to a report by LPI, which assumed a ratio of one teacher for every 10 children, California will need more than three times the number of teachers that currently exist by full implementation, up to 15,000 more lead teachers and nearly 20,000 more assistant or teacher aides.

In addition to the state superintendent's extensive efforts to support teacher recruitment and the partnership we have with California Volunteers College Corps, the CD is working in partnership with the Commission on Teacher Credentialing to address the number of teachers who will be prepared to teach in TK, as well as to support those already teaching to meet the new requirements. Efforts have included extensive investments by all of you in workforce development in anticipation of the need for more TK teachers.

The 2023 budget also permitted the CTC to issue and renew a one year emergency specialist teaching permit in early childhood education that authorizes teaching in a TK General Ed Classroom. The CTC is also working on issuing regulations for a PK to third specialist instructional credential, which is grounded in child development, the science of learning and development, and preschool to third grade pedagogy.

While we know we have challenges ahead, we also know from the research how much the benefits of UPK are only fully leveraged when the programs are intentionally designed with quality and the science of learning and development in mind.

This includes having well prepared teachers who understand child development as well as well prepared aides operating in a classroom with a Low adult to child ratio, as well as looking at investments in TK through a pre or pre K to third grade frame to ensure that the investments made in the early years consecutively build on one another in a very coherent and aligned fashion. With all that in mind, we are really thankful to the 100 million you invested in for the Early Education Teacher Development grant.

From 2021-22. CDE received requests totaling 152,000,000 for these funds and has awarded these to 72 local education agencies representing nearly 900 LEAs statewide.

Grantees have said they plan to use their funds to work with institutes of higher ED help teacher candidates obtain the multiple subject teaching credential assist current TK teachers in meeting the 24 units of early childhood education needed support teacher candidates in financial assistance, tuition, mentoring, advising cohorts, and various teacher pipeline support activities. In closing, the promise of UPK is the promise of opportunity for all and a key part of our vision for transforming California schools through the creation of a UPK and expansion of both TK and the California State preschool program.

California has taken the first big steps to ensure all children have access to quality early education programs in the year before kindergarten that support the whole child and the family, while also supporting steps toward targeted universalism for three year olds. We appreciate your engagement and support in this issue, and I have with me Steven Proffer and Virginia Early to assist in answering questions at the appropriate time. Thank you.

Thank you. Next we'll hear from our representative from the Office of Public School Construction.

Good morning, chair and members of the committee. I'm Lisa Silverman. I'm the executive officer for the Office of Public School Construction and on behalf of the state Allocation board as well, the Office of Public School Construction administered the school facility program, and that's a $42 billion bond initiative that's been approved by the voters. In addition, the program has also been funded with another source of funds, which is $1.4 billion recently with General Fund proceeds, again to continue processing the current grant applications that we do have.

In addition to its role of administering the School Facilities Program, the Office of Public School Construction administers a California preschool and Transitional Kindergarten and Full Day Kindergarten Facilities grant program. The program was established in the Budget Act of June 2018 and that provided that $100 million for the 2018-2019 budget year. That $100 million focus was to provide full day kindergarten programs either to establish new construction classrooms or retrofit existing classrooms. So the state allocation board actually proposed two filing rounds in which they executed.

The first filing round was established in January 2 of 2019 and closed January 31 of 2019. There was 37 and a half $1.0 million made available for that funding round. We actually had over $316,000,000 in requested funds from our grantees, and the board did allocate 12 projects for over $37.1 million. The second filing round was established and that was $60 million. And that started in May 1 of 2019. It closed May 30 of 2019.

Out of the $60 million that we had to award, there was $405,000,000 of grants that came in. So again, that program was oversubscribed. The salication board took action to approve over $60.1 million in grant request and funded those projects on October 23 of 2019. So in total, there was $97.3 million funded already out of the $100 million, and that represented 47 projects we actually had an opportunity. The program was extended and expanded, actually, with the Budget Act of 2021 and 2022.

That expansion provided $490,000,000 of one time grants, again for new construction of new classrooms and a retrofitting of existing classrooms. And the State Allocation Board again established two filing rounds. One of the filing rounds is established began April 1 of 2022 and closed April 30 of 2022, and a subsequent round just recently closed. On March 2 of 2023, that program was expanded to include California preschool and transitional kindergarten as applicants to apply for the current funds as well. With that.

That filing around, that closed on April 30 of 2022. We were oversubscribed. There's $1.5 billion in interest for that 1st $225,000,000. Again, very popular program. So the board did take action in the fall of 2022 and nearly apportioned $225,000,000. That represents 72 projects, and that was just recently funded.

With the enactment of the Budget Act in June of 2022, there was an additional $100 million that was infused in the program, and it also did expand community colleges an opportunity to apply for preschool grant if they actually administer a preschool program on their site for a school district or a County Office of Education. So with their current funding round, we actually have $360,000,000 available, and we actually received.

We just closed the filing round, as I mentioned, and we received nearly $1.48 billion in funding request, and that represents 446 applications. So again, very popular program, and we definitely will be oversubscribed. These funds will be dispersed by the program, and we anticipate the disbursement of these funds, the 360,000,000 come fall of 2023. So with that, I conclude my presentation and open to any questions.

Okay, thank you. Certainly come back to you. Next, we have on the video here a representative from the San Diego Unified School District. They have been a leader in implementing UTK, so we want to have them share their perspective.

And Stephanie, if you start talking, the video will turn on for us.

Okay. Thank you. Thank you Mr. Chair and Committee. My name is Stephanie Siminsky from San Diego Unified. I'm the Director of Early Learning. And San Diego Unified was early in implementing universal access for all four-year-old children within our TK classrooms. Our goal was to put students on the developmental trajectory towards kindergarten readiness. Our success is attributed to the intentional way we approach the implementation of universal transitional kindergarten to make a greater impact.

As we looked at approaching this challenge, we found that there was no magic formula and no single explanation for success. Early implementation included essential components for a high-quality universal TK program that focused on conditions for equity and access, recruitment and retention of our workforce, and design curriculum with professional development to support new learning to create equitable and accessible programs. SDUSD opened 189 classrooms in 2223 which included a minimum of one UTK at one of our 118 elementary school sites.

The district is expected to add another 24 classrooms for the 23-24 school year due to demand. The district currently serves over 4300 students and approximately 2300 are after the February 2 birthday. This means that the district has made the investment to cover over 50% of the cost with the one-to-12 to 12 ratio due to not earning dDA outside of the eligibility timeline.

We also work to strengthen our continuum of programs by building feeder patterns with our preschools, offering choice for our parents, and partnering with our extended learning opportunities. Our family Engagement Department and school sites offer workshops, support our families with applications, and hold answer and question sessions with families and educators to support our students in our classrooms. We have focused on making investments in our workforce and staffing by holding extensive recruitment events and we currently have all of our positions in our UTK classrooms filled.

We were awarded funds with the Early Education Teacher Development grant, our classified school employee teacher credentialing program grant, and we've built partnerships with higher education colleges and universities through Teachlead San Diego.

We were also recently awarded by the California School Association University Partnership CASUP for the Exemplary District University partnership with the University of Laverne for having over 70 educators currently on a workforce pipeline, earning early childhood development education units, being on an early childhood development teacher permit pipeline, earning a multiple subject teacher credential or an education specialist credential.

Also, each of our universal TK classrooms are staffed with a co-teaching model which includes an ECE teacher and multiple subject credentialed teacher. By having a preschool permit holder and a credentialed teacher utilizes expertise of early educators and credentialed teachers, providing RTK students with a high-quality, age-appropriate learning environment. To support the conditions for learning. SDUSD has also utilized the UPK planning and implementation grant. This funding has been essential source in providing curriculum resources and professional development.

Some of the curriculum and resources used to support this special environment have included the California Preschool Learning foundations and frameworks, Second Step for Social-Emotional learning, a specialized phonological awareness program, benchmark ready to advance, which is a district-adopted curriculum and the DRDP.

Ongoing professional development opportunities throughout the year include summer institutes, after-school trainings, interactive family events, principal and leadership series, release time, and collaboration for PLCs, demonstration classrooms, and coaching, take, make, and teach events and we have also utilized the webinars offered by the California Department of Education. As with any new program, challenges certainly are part of it, and it's an important part of improvement.

With rapid expansion, it is not only difficult to recruit a high quality workforce, but in an economy where the workforce does not exist, is an even bigger challenge. We find tremendous need for ongoing professional development to continue recruitment and retain our investments. The cost of a visiting teacher is over $300 a day, and with over 400 educators, new learning opportunities across the district are quite costly. Also, with the expansion, a one-to-10 ratio will impact staffing.

Right now, with 189 classrooms, we would need approximately 200 para educators, additional funding, and a clear timeline for implementation to meet this requirement. For SDUSD, net capacity is not always an issue, but as we expand, demand is not always where open classrooms exist. To reach our goal, where every family has access to a new renovated TK classroom in their cluster will cost over $200 million. We are working towards this, but we need support to get there.

We have found that we have not always qualified for additional monies through grants, but we also have great need. And one thing that we have found is the physical environment of our classrooms is extremely important as well. Furniture, materials, and consumables are very costly. Roughly each classroom ranges from $5,000-$10,000. We have witnessed through the data students making progress and growth. We have heard testimonials from teachers, parents, and administrators about the difference the program has made in the lives of the children.

And with a projection of close to 4600 students for next year, we know we are making a difference in our community. Thank you.

Okay, thank you. Questions or comments from this panel? I'll start off. One of the issues that I've heard going around the state visiting TK classrooms is one the excitement that it's there for families and expanded access and opportunities. And of course, families will have to pay $2,000 a month in some jurisdictions, which is more than it cost to send your kid to UC San Diego or UC Berkeley. And so transition of this element, it takes time. It's going to not be done overnight.

We're also implementing universal after-school programs concurrently. And those two things have a link, because while LPI talked about the majority of schools are doing full day, which is good news, only 21% are doing part day. Full day isn't a full day, it's a full school day, which is roughly the equivalent to what kindergarten is, and kindergarten through 6th grade at most of these school sites. And so after-school programs are always a key. So that's on our agenda today.

That's another day for after-school programs. But what can we do as we implement universal after-school through the extended learning program and universal TK? A lot of it is adults and people, but what things can we think about doing to help push these out effectively and sooner, and help kids and help families?

So, Sarah Neville-Morgan, representing the State Superintendent of Public Instruction, we actually think a lot about the expanded learning opportunities program and TK and CSPP altogether. And it is really helpful to think of the coherence that needs to happen across those, because they do sort of hang together to create the solution for a lot of families and schools. And so with the Expanded Learning Opportunities program and thinking of TK, they both need that workforce support.

So how we create professional learning that includes the ELOP and the TK and the CSPP, so that they are all grounded in child development, in the science of learning and development for those early grades. So the expanded Learning Opportunities program is not just obviously TK, it's TK through six, but as they bring in more TK and four-year-olds and then kindergarten in those five-year-olds, that was not a typical space for a lot of our after-school programs.

So this really is a new area for them to dive into. The strengths of state preschool and the strengths of expanded learning are they pull from their community. So those staff and teachers really represent the children, the languages, the races and cultures. And so having that pipeline for them is really critical in creating that coherence.

The other part, I would say, as you look at expanded learning and some of the CSPP is addressing the need for LEAs to have a license exempt status, to be able to actually operate those and bring in the children where they need to and to address full inclusion in their programs. So as we look across those, sort of what a school district has to do, it is above and beyond what our community-based organizations have to do.

Because they have to meet school code, requirements, and licensing. And so that has created some barriers in how the schools are able to operate or not operate those programs.

So what do we need to do potentially to help school districts do this in a more seamless and expedited manner?

So I would say looking at some of the language around creating license-exempt and making sure it's in there for the expanded learning Opportunities program, that piece, and then looking at our state preschool program and having that for three-year-olds right now it's exempt for fours but not for three.

License-exempt providers like nonprofits are due after school?

It's more that the school district would have a license-exempt status so that they wouldn't have to do that. And I would say the other big piece is that professional learning and ongoing workforce supports so that it doesn't matter where the child is. They're going to get quality and they're going to have an adult who understands development, culture, language, all of those pieces, so that families, as they are looking at their options, aren't having to say this one is better because of quality than this one.

But they know that as their child enters state preschool or TK and then moves into the after-school part, that they have somebody who actually understands development and is able to support social, emotional and all of those other pieces.

Okay. And then my other issue maybe for finance here is as we implement TK in California, of course, we have the teacher and then we have a bunch of little kids. And so because of this, we have a second teacher just making the class better for the kids but also better for the adults, so they don't have to have one adult, 20 kids. So that's a godsend for the teacher in there, and we have to implement that over a number of years.

So there's two things that we're kind of changing going forward. One is we want to change the ratio, which I know you're delaying, and two is we want to put in these standards there. One of the issues that we hear, and maybe you're pushing the delay for the ratio is money, but also is on the people right now.

But doesn't the changing the standards have that same problem, is that if you say you have to have these standards when you start, we may just weed out people that can even start in the first place, and it will be back to the same problem as opposed to having people classified employees start in the classroom and give them time to achieve those standards, basically learning and getting more education as they go along.

So I would note that the new requirements that are proposed in TBL would not take effect until 2028-29 which is five years from now and three years after the full implementation of transitional kindergarten. Additionally, I would note that the real goal of this is to put in new qualifications for the second adult that's interacting with these young ones currently. I would reiterate that there are no qualifications for the second adult that is in that classroom.

They must be 18, fingerprinted, and an employee of the school district, and that's all. Additionally, you could, under these requirements, get as little as six units of ECE and be qualified for the Child Development Associate or, sorry, for the Child Development Assistant permit. And that would make you qualified under these provisions.

Yeah, but what's the problem with having somebody start and then giving them time to get there as opposed to having to have that before they start?

Currently they would have time to get there. They would have the five years to.

Get there and then after five years they'd have to have it.

Yes. Or they could be participating, for example, for the child development permit. They could be participating in a practicum and that could be part of it.

Yeah, but in five years we'll probably still have a people problem trying to get people to find positions. It'll be the same thing. So the issue is you're trying to get people in the door to start the job and then get them up to speed to keep them there as opposed to saying, oh, in five years everyone's going to have that. It's all going to be dandy. I'm not sure if that is the reality. You're shaking your head?

Yeah. So Sarah Neville-Morgan again, we would say that it is really important for the teacher and the teacher aides that the people in the classroom to have some child development and instructional strategies as part of their core understanding that there is five years to get there. Also, hearing you and that there is a workforce shortage overall. So how do you create a pipeline and pathway?

What we do think is really critical is that we set a goal and move towards it because if we just take it off the table completely and try to bring it back later, it's harder. So really saying here is the goal. How are we going to help you get here is important. And we would always stand behind. Our children need and deserve really to address the promise of UPK.

They have to be high-quality programs and adults matter the most, which is why we will always stand behind, like in state preschool and the rest of the subsidized world needing higher rates and wages. Those adults really matter in those spaces.

Yeah, no, I understand, but I just kind of think about in regular classrooms, we've had a hearing last week, 6000-1000, as you know, emergency credential teachers for, since as long as I've been here, and we still have it. And so we allow people to come in and become a teacher right away with emergency credential and then get their credential as they go along. So it just seems that this is not quite what we're proposing here, but we'll sort that out.

And I know there are other ideas how to get there. Any other questions or comments on this section? Assemblymember Dahle?

I just have a follow-up question. So the 15,000 more teachers, is that specific to TK?

Yes, that is specific to TK.

So in previous hearings we've heard that that's close to that number that we're just short for general teachers in the state.

Was it the 15th?

Hanna Melnick, Learning Policy Institute. We projected that by 2025-26 the state would need 11,900 to, I think it was 15,600 new TK teachers in addition to those that we estimate are already in the TK workforce. That would be in addition to any other teachers that were needed in K to 12.

Okay. So I think if I recall correctly, that total would be around 30,000 if we added what we're talking about for TK, plus our previous hearings that we've been through several now. And the workforce shortage is something that we just continuously hear over and over again. And so I think to the Chair's point, we have to decide priorities. Right? Like, goals are great to set. But I think that right now we need teachers at every level in every classroom.

So if that's where we need to spend our time and resources to make sure that we have the most credentialed teachers possible, the fastest, I think that's where we should spend our time and effort. So thank you so much for all of your comments today and your information for us. Thank you.

Okay. Thank you, Assemblymember Ting.

Thanks. Mr. Chair. Just a quick question to Ms. Melnick. You mentioned facilities being a major issue. Could you expand on that? I know that in the past we had done facilities grants to expand kindergarten, and much of the money went unused. So I'm curious as to what the issue is or what some of the hurdles are right now.

Sure. I can just speak to what was in the survey data, and a lot of the concerns that were raised in the open response was about both the funding level and needing support and how to meet the new standards for early learners, especially from districts who were kind of new to tiny bathrooms and all of that. And there was also concerns from Basic Aid Districts about the lack of funding to support the facilities. And I think others could speak to the prior experience better.

I was going to go to Ms. Silverman to see if she had anything to add. Also, in particular, because we did have money available, many districts did not take us up on that offer. In fact, so much so that it ended up not being used. So I'm curious as to how the construction piece fits in.

Well, our current program has been oversubscribed on multiple levels, so it was oversubscribed even currently, with the current filing round that just closed on March 2 of 2023, we have over nearly $1.5 billion in funding requests, and we currently have only 360,000,000 to allocate. So we've repeatedly shown and demonstrated over the last few years that we have been oversubscribed.

And this is specifically around kindergarten classrooms.

We have data on kindergarten classrooms and also data on TK and pre-k. So for full-day kindergarten classroom, I'll just give you an example of our last funding round. That was in the fall. We actually funded 53 classrooms. That was 48 new construction and five retrofits. And in the current application pool right now, we actually have 933 transitional kindergarten classrooms that are being requested. And we actually have. Excuse me, I apologize, I'm giving you the wrong data.

In the current trajectory, in the current application pool, we actually have 676 classrooms that's being requested. For the program grant, that's nearly $500 million. And for transitional kindergarten, the requests have been 1085 classrooms, and that represents $820,000,000.

Got it. So we were in this exact Committee room a couple of years ago, right, where we had appropriated, I think it was 100 or 200, few $100.0 million toward kindergarten classrooms. Try to get LEAs to do it. People didn't apply. So was the reason the change happened? Because now you're shaking your head like, am I misremembering something or?

LAO wanted to help out, too.

Edgar Cabral with the LAO, I think your memory, I believe, is correct. I can't remember the details, but I believe the initial grant that you're referring to, I think, was more narrow in who could apply. So I think it was specifically for full-day to convert from part-day to full-day. Since then, we've expanded the program. So now it's state preschool, TK, kindergarten, and so it can be for either just more expansion or to convert from part-day to full-day.

So I think that explains the difference in the demand. I think also when we did that, we hadn't enacted or planned to go to universal TK. So that obviously has significantly increased interest, I assume.

Right. And I think what we were trying to do is try to get ahead of knowing that universal TK, universal preschool was a priority, trying to encourage schools to really move that direction. And I guess many of them didn't until we took our legislative action. And now they're sort of behind the eight ball. So at this point, you're saying that there's more demand right now than funding.

So then what would delaying this proposal to delay $0.5 million of that funding, what would be the impact?

Well, it actually will give school districts an opportunity to come back into the program at a future time point. These projects have to convert and again, go through the construction phase. So again, we'll administer anything that we do receive, granted it in a budget act. So again, what's the harm? I know we demonstrated that we'll still be oversubscribed by 1.1 billion. So districts will have an opportunity to reapply once there is a program established and additional money is available.

So the harm is basically there will be just a few months delayed.

A few months delayed or a few years?

Well, depending on the budget act, how long? There will be an infusion of new funds that are being brought to the program. So obviously we have applications that demonstrate need.

And what's the Delta right now for the oversubscription?

What's the 1.1 million? 1.1 billion. Sorry.

So 1.1 billion is unfunded.

Potentially be unfunded, correct.

I'm sorry. What do you mean, potentially be unfunded?

Well, it's just we don't have enough money to fund the entire grant pool, so we only currently have $360,000,000 to award and the current funding cycle.

So what's the unfunded amount?

The unfunded would be 1.1 billion.

Got it.

But it's basically we return the applications back once we have awarded the $360,000,000. So it won't be an unfunded. It just demonstrates that there was a need.

Why would you send the applications back versus just putting them in a queue?

Well, there's no additional funds that it's being prescribed at this point in time. Right. I'm sorry?

You would make them reapply then?

Correct.

Why is that? That seems like to be a lot of time wasted.

Well, we currently don't have additional funds to award. And then the state allocation board made provided regulations that once the funds have been expended, then the applications are returned. And it gives districts an opportunity to. If there is an infusion of money that comes in the future, then districts will have the ability to reapply for the program because things may have changed as well based on the priority points and preference points that are established in the program.

So it's a point in time once you submit an application.

Okay. Just seems at a time when people on the ground have limited time, it seems like a waste of time. Waste of their time.

Understood.

And seems like bureaucracy justifying itself. So it doesn't make a whole lot of sense to me. Any other barriers on the financing point that people want to make? I'm sorry, in terms of the construction point. Excuse me.

Okay, thank you. Yeah, maybe just a follow-up on Mr. Ting's question. So if we didn't have enough money to go all the way to reinstate what we had previously allocated, what would we need just to do? The bare minimum of projects are kind of in the queue, ready to go.

Well, basically, these are just estimates at this point in time. So staff would have to go through the estimates that they submitted in the application. So just the demonstrated need would be 1.1 billion. And again, we would have to ensure that the amounts requested actually meets the components of the program.

It's 1.1 billion.

Correct.

Okay. You can follow up with us on those details. Okay. Seeing no other questions on this item, we will hold this item open, of course, and revisit it later in the budget process. Issue number two, childcare system oversight, pandemic relief policies.

Okay, we have an extensive panel here, important topic. So if you could please try to keep your comments concise, it would be appreciate that we can get to the rest of the agenda and hear from the public as well. Thank you.

Thank you, Chair. Kim Johnson, California Department of Social Services. Glad to be here with you and Members and appreciate your opening comments this afternoon. I am just grateful of what this Legislature and this body with the Governor have been able to do over the past few years in really moving this system forward. I want to mention again, I know the legislative body, over the course of several years, put forward a proposal to establish collective bargaining amongst the in home family childcare programs in the state.

And this Governor, Governor Newsom signed that legislation, AB 378, to allow us to have collective bargaining within this work. And I would just say it's right on time in terms of what we then experienced in the pandemic and the ways in which we could partner with childcare providers united in investing in the right ways.

I also want to just really appreciate our work that the Department of Education and the Superintendent, as well as the Department of Social Services have done together to transfer many of the childcare and development subsidy programs effective July of 2021, and not only thank the Department of Education for their work in that collaboration that we did together, but also, again in the pandemic, partnering on efforts such as what you just spoke about, historic preschool expansion and ensuring that we have the mixed delivery system in that space.

Also, places like pandemic electronic benefits, which were supported 5 million children over the last few school years with $10.6 billion to support families who weren't able to access some of those supports, and how we've kind of launched and leveraged some of those initiatives to now have universal school meals in our school systems and are now planning towards a permanent summer EBT Program to ensure food security, et cetera.

So many, many partnerships in that space also want to thank all of the stakeholders, families, children, program administrators, who supported providing and lifting up the strengths of what had been working well as we transition in that system. I'll just say in your agenda points to it. The efforts during the pandemic were simply extraordinary, and we did continue to lead first and foremost with equity.

So when we collectively made the tremendously hard decisions to do things like closed schools, we also thought about the spaces where home wasn't safe for children, children engaged or at risk in our child welfare system, that we not only invested in having greater access to childcare subsidies for our essential workforce, but also those families who that connection to a stable and strong adult and loving caregiver was huge in making a difference in lifelong trajectory for those systems.

I also want to say that the federal funding is the reason we've been able to go so far, $5 billion in federal funding supports that have allowed us to do much of what we've done together in these investments. And our ability to know how and where to invest was largely driven by the work of this body with the Assembly Blue Ribbon Commission Report on early learning and care, as well as the master plan on early learning and care that we worked on together.

So we have the roadmap, we have the plans, we have the priorities that we sat down together to establish, looking at those evidence based practices and hearing from the voices of children and families and communities to go further, which really did allow us to move more quickly and rapidly in our ability to implement much of the relief and supports, not only for the workforce, but also for the infrastructure that you'll hear more about.

Again, your agenda, I think page nine points to some of the specific reliefs. We're going to have some conversation about the packages and supports that we've been able to put out. Again, workforce, workforce, workforce. A theme you'll hear more about, and that economic relief to sustain and retain existing programs is tremendous, but also to recruit new people into this early learning sector and field.

I also want to lift up the tremendous work we've been doing together on having opportunities to continue skill building and competency building and ability building with trauma informed approaches and professional development investments across the way. The investments in infrastructure can't be understated. Everything again, from facilities, as again, your earlier panel was referenced.

This is huge too, as we look to create more opportunities and access across communities in California, the ability of the intermediaries, those childcare, resource and referral agencies, the local planning councils and others to also be ready and prepared to look at data and again, drive our investments and be ready to go. But also during the transition, we look to improve around automated systems. Again, things that we've learned from the pandemic that work like direct deposit for our programs going forward.

So as we're looking ahead, I just have to say as the Director of Social Services, that it is critical, this childcare and development subsidy is a critical component of our overall array to disrupt poverty in this state.

And it absolutely gives us greater abilities to do things like leverage our investments in addressing homelessness and ending family homelessness, transforming our children and youth behavioral health systems to ensure children and families have the tools and resilience-building skills to overcome adverse childhood experiences, to look at strengthening strength based voluntary home visiting, which is embedded in our CalWORKS program for families, and of course, the food security components that I mentioned prior.

Just absolutely grateful for the opportunities that we've been working through together to continue these historic investments into communities. And very much recognize there's more to do, but to not only transition to work through the pandemic and its stand up programs in the matter of weeks, et cetera, but also to take on new and significant transformations like rate reform in our subsidy system together has been extraordinary.

So I'm grateful to the leadership of Deputy Director Jaime-Mileham, who you'll hear from next, and many of our team on the ground, but most of all to our families and our partners across the state. Thank you.

Okay. Thank you. Next, we have a witness on WEBEX. We have Anna Powell, the Center for the Study of Childcare Employment. And Anna, if you start talking, we will see your face.

Hello, and good morning to the Committee. Are you able to hear me?

Yes. Thank you. Please proceed.

Thank you. Wonderful. I'm a Senior Research and Policy Associate from the Center for the Study of Childcare Employment at UC Berkeley, and my research is focused on workforce, workforce, workforce, specifically the teachers of children from birth through age five, as well as the childcare centers and family childcare homes where they work. So who are the Members of the early care and education workforce in California? They are majority women of color. More than half are age 50 or older, and about one-third speak Spanish.

So how has the workforce fared since the pandemic? Well, as of January 2023, the Bureau of Labor Statistics shows that there are 93.3% as many childcare worker jobs in California compared to pre-pandemic February 2020. In other words, a loss of 6.7% of those jobs in this category. In the last month, in fact, California saw a decline of 1900 jobs. The overall jobs estimate is similar to the national estimate for childcare workers, where we have about 94.3% of pre-pandemic employment levels.

Now, our research shows that low wages drive these worker shortages. For example, the median wage of a full-time center teacher in California is $39,500 per year. And we estimate that center teachers with a bachelor's degree saw a decline of 1 to 2.5% in their wages between 2006 and 2022, after adjusting for inflation. In fact, bachelor's degrees are pretty common. About one-third of FCC providers and one-half of central lead teachers do hold them.

But a TK teacher with the same degree earns at least double the salary. So economic insecurity is common, with the most severe effects for our Black, Latino, and immigrant educators. As an example, only seven out of ten childcare centers can offer health insurance to full-time staff. Only 21% of family childcare providers have retirement savings of any amount, and food insecurity is relatively high.

About a third of this workforce is food insecure, but it is in fact, a bit higher for center teachers who are women of color or who are immigrants. For example, 42% of our immigrant center teachers. In the first year of the pandemic, job turnover in childcare centers was 58% for assistant teachers and 32% for our lead teachers. And so this inadequate compensation and benefits drive this turnover.

And with rising inflation and stagnant wages, we know that highly skilled educators will continue to leave the field or not join in the first place potentially. So, these staffing shortages existed before the pandemic. And while California made important investments to stave off mass closures during the pandemic, the job of a preschool teacher or a childcare worker remains this high-skill, low pay job. I'm going to speak briefly on the actions that California took relative to other states.

So, fundamentally, we will need further research to determine whether particular interventions with pandemic relief dollars were effective in our state versus another state. But we do know that most states tried to dedicate specific funding for workforce compensation. For example, New Jersey offered retention and recruitment payment to childcare staff, and in fact, their educator workforce numbers exceed the pre-pandemic estimate. So, in other words, more than 100% of that pre-pandemic number.

Whereas here in California, we relied on these grants to programs which really serve this important function of offsetting lost revenue. Right? Maintaining the current wages that were being paid before primarily. We're now, with relief funds, winding down, facing what some of you have been hearing about, potentially this ARP Cliff, American Rescue Plan Act Cliff, with the funding where California's emergency funds, they did prevent deeper losses, but we do need that ongoing investment.

Fortunately, the state has put a good effort into developing this true cost of care funding model for reimbursement rate reform. So we should continue to act as leaders in this space by following through with the budgetary support for those rates. And as I think many of the folks on this panel are going to speak to, parents are already struggling to afford care, so providers can't afford to raise their prices, so they continue to pay low wages to their teachers.

And the current reimbursement rate for subsidized care, cannot cover the true cost of quality care. As a result, we effectively have to maintain low wages for the time being without this increased funding. So we're going to continue to struggle to hire and or increase enrollment, license capacity, you name it. Fundamentally, state dollars for more spaces must be coordinated with the increases to reimbursement rates. Otherwise, programs in many regions may not be able to staff up or absorb more funded voucher enrollment.

One final point, we agree that enrollment-based rather than attendance-based funding is a good model to consider from the long run. We find that contract-based funding streams that use this mechanism have more stable staffing and enrollment, for example, Head Start and Title V Programs, which were less likely in California to fall onto layoffs or furloughs or hour reductions. States like Illinois are expanding their use of contract and enrollment-based funding mechanisms to improve the stability and allow for more wage increases.

So, in conclusion, we understand that there have been some challenges in reaching the new licensed capacity funded by subsidies. But capacity alone is not a reason to delay new spaces. Instead, California must tackle the structural challenges that keep wages low and drive teacher shortages. Thank you very much.

Okay, thank you. Next, we'll hear from LAO.

Jackie Barocio with the Legislative Analyst Office. As noted on your agenda on page nine, we did provide a summary of key COVID-19 relief activities that are currently set to expire on June 30, 2023. Two that I just wanted to highlight for your Members specifically are the Family Fee Waiver, expiration of the Family Fee Waiver and then also expiration of reimbursement flexibilities that were enacted during COVID-19 in the case of Family Fees.

In our analysis of the Governor's Budget, we just wanted to flag that the expiration of the waiver likely will create barriers to care for low income families who are not able to afford these fees. Thus, the Legislature may want to ask the Administration how big of a barrier they expect the expiration of the family fee waiver will have on families.

Additionally, the Legislature could ask the Administration what changes could be made to the family fee schedule to mitigate any potential access barriers while still complying with the federal family fee requirement. As for the reimbursement flexibilities, during COVID-19 changes were made as to how childcare providers would receive their reimbursement rates. Specifically, changes were made that they could still receive their full reimbursement rates regardless of how many care hours or children served.

We find that maintaining some form of reimbursement flexibilities, at least for the voucher based programs, may have merit since the providers for the reimbursement flexibilities that were enacted, they were at least still required to have children enrolled and to provide at least some level of service to continue to receive the payment amount. And what we've heard anecdotally from providers, this did provide a level of predictability for payments and potentially made them more likely to accept children that were receiving vouchers.

However, in the case of direct contract providers, the way that the reimbursement flexibility was structured, it did not necessarily require them to have children enrolled. It really was just based off of pre-pandemic enrollment levels. So we find that maintaining the existing reimbursement flexibility for direct contract providers may not align with the overall goal of maximizing the number of children served. Thank you. That's it.

Okay. Thank you. The next speaker is. Where is my sheet?

It's me.

Yes. Andrea. So the DSS Rep, we're going to skip you because we heard most of it. So we're going to hear Andrea Fernandez.

Good morning, Chair and Committee Members. My name is Andrea Fernandez and I am the Program Director for California Children's Academy. We hold a CSPP and CCTR contract down in Los Angeles County that serves infants, toddlers, and preschoolers. In pre-COVID times, we were serving over 700 children per day in 15 campuses.

And first and foremost, I want to thank each and every one of you during the COVID we were able to keep our doors open the entire time serving children and families because of the COVID relief that you provided. So thank you. I'm here today to share a little bit about how the effect of the reinstatement of the Family Fees and what it would do to subsidized children and families in the California ECE system.

A survey was conducted by some of the early education folks, and over 7000 families who are currently receiving subsidized care services responded. Over half, 55.9% stated that they would drop out of care because they would not be able to afford the Family Fees. 75% of those families who responded earned below $50,000 a year. Reinstating the Family Fee would be devastating to the low-income, marginalized families who would be most affected by this change.

Families have told us that they've never had to pay a Family Fee before. They wouldn't be able to budget it in, they wouldn't know how, and they're barely making ends meet as it is, keeping a roof over their heads or putting food on the table. They've told us that they're scared because they don't know what they're going to do with their children. Or where they're going to leave them while they work.

Some have stated that they'd have to stop working and take their children with them, and many other scenarios that could potentially harm children and put them in harm's way, but definitely would not be developmentally appropriate. They've also told us that with their basic needs such as food, diapers, gas, all being so expensive, they can't afford one more thing, something they haven't had to think about it in three years.

As our enrollment still has not recovered from pre-COVID times, an additional mass exodus of families out of our programs would collapse the Early Childhood Care System and devastate the California economy. Additionally, it compounds the high cost of keeping our doors open. The costs not only have risen for the families and expenses, providing food for the children, staffing costs, but it's also a barrier for us as well as providers.

Additionally, on top of that, the infant toddler cost to run infant toddler programs with staffing ratios is significantly higher than a State preschool program and it is difficult to keep our doors open and staff in our programs. But we do it, and it's helped because we've had the COVID relief across the State of California. The family fees would be devastating, but most significantly to the low-income, marginalized children and families who rely on our services to keep their children safe and to keep them working.

So I would urge you to please find a way to keep the Family Fees at bay because our families would truly be devastated, but also the California economy. Thank you and I appreciate your time and if you have any questions, I'm happy to answer them.

Thank you. Next we have Karina from Parent Voices.

...

Hello, my name is Karina Esquer. I am married and I have three kids 3, 8 and 11. My husband worked full time for ecology. I have a disability, vision disability, and I am full time student at Sonoma State University. My major is sociology and my motivation is to help other people.

Since I hear that I have to pay next semester more than $500, I got stress and worry because I am a study to get a higher education, to change my life, to get a more economic stability for my kids and my family. Every day I wake up at six in the morning and take the bus to Sonoma State University with my little girl, that she's three years and I motivate her. I say, you know what? You and me, we're going to school.

And I head to the school, child school, and she's happy. I say, you know what? When I come back I'm going to bring you something. And when I pick her up, she always excited. And I say, how was your day? And she's like, it was great. I play with my friends and she's socializing and she's having a good time, she's doing activities, she's behaved so well that right now you can see her, she's really quiet and I'm really happy. And I say, you know what?

I brought you some donut. She's like really happy. So we head home at 05:00 p.m. And I get home, I do the cooking for my other two kids. And then in the night I do my homework because I know the importance that is be there for my kids. But also the only way that I can do something better for my kids is education. And I know that child care is essential for little kids because the future is education.

And I learned it because I was in poverty. I was in food stamps assistance and public assistance. And right now I'm not in food stamps. I do receive SSI, Social Security, but the only reason that I receive it is because right now I'm doing what I can do to get a higher education and earn my bachelor's degree in sociology to help other people.

And the reason that I'm here right now with you guys is to please help me and support me because 500 more dollars right now, I don't know, is too much for me right now because I only receive $1,000 and my husband paycheck. We live paycheck to paycheck. And I learned so much in sociology that education is essential, that cultural capital. I want something better for my kids, something better for me.

And I know that you guys are humans like me, and you guys understand me, and you guys can do something for my little girl and for other family. Education empowers me, and education empowers my children. So please do something and help us. Thank you so much.

Thank you. I have one question. Karina, you didn't introduce your daughter. What's her name?

My daughter is Kate. Kate Esquer. She's three. Thank you.

She did a great job.

Thank you so much.

Okay, thank you. Next we have Kimberly from the care providers union.

Thank you.

Tough act to follow.

It is a tough act to follow. So, Kimberly Rosenberger, Childcare Providers United, which is SEIU and UDW collaboration. But as was said earlier, you can just call us workforce, workforce, workforce. We represent the family childcare providers. And when we started our campaign 10 years ago, there was about 40,000 workers. In 2018, when we entered the final hurdles to win the right to unionize, there was about 36,000 that were assessed eligible to vote. In that time, it was clear that the numbers were declining.

We knew that there was an issue with the ecosystem. It was very fragile, and we did our vote during 2020, right around the start of the pandemic. At the peak of the pandemic, numbers declined to 22,000. If it wasn't for the quick and monumental support of the Legislature. We did an agreement, two agreements, COVID agreements, prior to even negotiating our first contract, to help stabilize the workforce. Those help that prevent that childcare workforce from collapsing. We're back around to mid 20,000, so it's not great.

We lost nearly a third of our workforce from what we had 10 years ago. But it does seem that some numbers did return back into the workforce, in large part due to the investments from those COVID agreements.

The key investments included moving to enrollment, to giving stipends, which helped offset the subsidized children, because, as the P5 Study that came out recently indicated, only 25% to 30% of the actual cost of care is covered by subsidies, which means our childcare providers are wholly dependent on the private families to support the overall cost of running the business.

And those private families, because they have more resources, because they were more likely to be able to work from home, were the first to take their kids out of the childcare during the pandemic. And so our providers were running up credit card debt, not able to pay their mortgage or rent, and so that economic relief was huge. Afterward, we also were able to get an additional 16 sick days, paid sick days on top of the 10 that are in statute.

Those were carried over in our CCPU two year contract, which is set to expire in June of this year. Which means, that while we did get 75% increase in the regional market rate and a subsidy which brought them up to about 10%, that stipend is set to expire. The stipends from the COVID agreements have expired. So we are going to return to a lower rate than what we had during those three years.

We're going to move away again from enrollment, which takes away the stability of our childcare providers, because whether or not that kid attends, our childcare providers are still supporting them. They're still keeping a slot open. They're still absorbing the cost of that child not attending, even if they're not getting the dollars from the state.

And also, since our contract is set to expire, that also means they're at risk of losing those paid sick days, which were really crucial to helping them take the right measures to prevent the spread, to prevent any illnesses from going to the children and thus their family. So what we learned is something we already knew during the pandemic, that the child care structure is very, very fragile.

We know that there were certain things that we did and we invested in that we would like to see continue. That's paying higher wages, that's moving to an enrollment model. We, through our JLMC, have also recommended an alternative funding model, which considers the cost of care. It's a more equitable approach, as well as making sure sick days are carried over. We want our families to be able to go to these childcare providers.

We want our childcare providers to take all children, including slots that are subsidized, not having to rely on private families, which is a really unstable workforce.

And finally, we are appreciative of the partnership of DSS and of the Legislature, but none of the stipends, none of the additional funding that we negotiated, despite the quick actions of the Legislature, were received on time to our providers. Which meant that they were absorbing the cost during that time, which was the interest on their credit cards, the late fees on things they couldn't make payment for, and an increase in food insecurity.

So that is something we would highlight that we would like to address as we move forward. And we know you're all working on it. 2020 was a tough time. You guys shifted over a lot of the workforce. So we just want to recognize that difficulty was absorbed primarily by our workforce.

Thank you.

Okay. Thank you. We have questions for this panel. Mr. Alvarez?

Yeah. Thank you, Mr. Chair. Thank you to all the testimony. Let me start with the question of, a basic question. So over the last couple of years, with all of the federal relief funds, we were able to do many of the things mentioned here today. Can someone comment on an overall general overview of what changes will be occurring as a result of those funds not being available for us this year?

I think the one that stands out, and I want to ask further questions about, so you don't need to get into too much detail, is the potential proposal for the fees, but maybe to either the Department or to the LAO, what changes should we be anticipating in childcare as a result of the lack of federal funding that we won't be receiving this year or into the future?

I'll start Kim Johnson, DSS. Again, as your agenda outlined, and I think we spoke to partially out of requirements of the federal funding spending, kind of what was eligible. It is relief. Your direct relief for the workforce was much of what the funds were intended to support so many of the policies that we were able to have flexibility on. For instance, this, Hold Harmless is another, so those are outlined.

So it's direct economic supports to the workforce that the large majority of the funds were utilized for. We do have, as you heard, the expiration of the waiving the family fees that changes, and some additional incentive dollars as well that were part of the COVID relief.

So as part of the Hold Harmless, are you specifically referring to the funding that occurred based on enrollment as opposed to attendance? Okay, and so the current budget proposal funds childcare based on attendance for this coming up year?

That's correct.

What is the anticipated savings as a result of shifting that policy?

The question, I think, is the revenues associated with what we project for family fees.

Thank you. Gabby Santoro, Department of Finance. Just for context, what we had built into the current fiscal year to waive family fees was 136 million. I believe roughly what we're projected to collect with the expiration of that waiver of family fees is around 80 million.

Okay, so let me just make sure I'm understanding correctly. The family fees are being reinstituted. They're not being used as a revenue generator for. These are two different things. We've got an issue related to funding based on enrollment as opposed to attendance, and then we've got revenue as it relates to fees. Those are two separate items?

Correct.

Okay. So if I could just maybe help me understand the first one on the projected attendance budget versus if we base it on an enrollment budget, what is that difference? I assume we calculate through some formula that there will be an attendance of some sort to childcare, and we pay based on attendance. However, we could also pay based on enrollment, which is a different amount. I'm trying to understand what the two different amounts are.

To clarify what we have built into the current fiscal year with the Hold Harmless policy to reimburse based on enrollment was 108 million. I think that is our assumption of what the associated cost is.

Okay.

And Assembly Member Alvarez, if I may. I think it's difficult to see that in the budget estimates just in terms of how the budget estimates childcare costs. It still assumes full enrollment, all slots are filled. So essentially, even within the numbers of the current year and the budget year, it'll show as if it's flat funded. What you're looking for is the difference.

You won't necessarily see that in the numbers, just in terms of how the budget is constructed, but we would see that after the fact, once we start getting actuals.

Okay, so we could either budget knowing we will have an actual number that's different, or we can budget assuming that that budget is the expended budget based on enrollment numbers.

Correct.

We have that option. Okay. And that's 108 million dollars. Okay. Yeah, thanks. And then the 136 million, just to clarify, or if it's wrong, please let me know. Is the revenue associated with what the Administration is currently proposing to not backfill or not to cover the family fees, is that 136 million?

That's correct. To clarify to Ms. Barocio's point about the difference between sort of maximum exposure and what we expect to collect, what we see is our maximum exposure is 136 million. What we expect to collect is roughly around 80 million.

You expect to recover 80 million from fees?

Yes, that's the expected total collected fees.

Okay. That gives me an understanding of that. Prop 64 was really an important component of funding this. Do we have a new assessment of revenue expectations for Prop 64? Anything that's been updated from when the budget was released a couple of months ago, are those also trending downward? I guess is my question.

Sure. Happy to take this question. There was a change to the application of use of Prop 64 revenues that was applied last year as part of the 22 Budget Act. In terms of impact to childcare. What was done is we held at a base revenue of 292 million.

We are holding that amount constant for application to childcare for the next two years, and we have up to 150 million General Fund to serve as a backfill to that 292 million in the event that revenues are insufficient to meet that level for childcare.

If I could ask the LAO's office, does that mean we are counting the 150 million and the 292? That's like not double counting, but it's two. How are we scoring that I guess?

So similar to what the Department of Finance said, last year there were changes made to the Prop 64 that would result in lower revenues. So an acknowledgment of the potential of lower revenues, 150 million dollar one-time General Fund was provided to backfill any losses over the next two years, not just for childcare, but for other programs that rely on Prop. 64 dollars.

So what's included right now in the Governor's Budget is they are assuming a portion of that 150 will be used to maintain funding levels flat for childcare, but then also other programs that rely on Prop 64 revenues. In terms of what revenues, updated revenue projections, our office, we recently did an updated revenue projection of Prop 64, and we're finding that Proposition 64 revenues may likely be well below what is the estimate in the Governor's Budget, meaning that a larger backfill would be needed.

So as a result, it is even possible that the 150 million dollar one-time General Fund that we've provided to keep to backfill losses over the next two years may not be enough to maintain funding levels for all programs, including childcare, in 23-24. So with that, we would recommend the Legislature ask the Administration how it would respond to Proposition 64 revenues potentially coming in substantially below January estimates.

Your estimates are that they'll fall so much below that 150 million is not enough?

That may be a possibility and something that we see in May. So if that happens, what is the plan? For example, we know that there is at least 185 million of carryover Prop 64 dollars from prior year childcare allocations that could potentially be used to further backfill if needed. But having this conversation sooner rather than in May may just give the Legislature a better opportunity to plan for it and consider all options.

Does the Administration have any comment on that at this time?

Yes. Thank you. As the LAO had noted, there is significant carryover from this 292 million baseline from what we're seeing in the past year. Based on this information, I just want to note that we recognize that in very recent years, the state has funded a significant new investment into the field to expand the number of childcare slots that can be filled. We recognize there is time to expand on that.

It's our intent to make sure that we maintain funding that is necessary to maintain filled slots and to meet our multi year expansion goals of 206,500 new slots. We believe based on these two goals, that we can meet them within the current trajectory of what's happening with Prop. 64 revenues.

So let me just clarify that because I thought there was something in the budget also to increase the slots next year. So you're saying that now that delay in increased slots could be used to backfill some of this lack of revenue.

To clarify, what the Governor's Budget reflects is a maintenance of existing slots with an additional ramp up of 146,500 slots, that there is funding included in the Governor's Budget to maintain this commitment. What we are proposing is to delay further expansion of slots in the budget year, which was previously planned of 20,000.

The intent being that we provide a one year delay to allow the field more time to utilize the funding for the 146,000 slots that we already plan to expand and delay our multi year expansion of this plan by one year from fiscal year 2025 to fiscal year 2026.

Are these all proposals that came in January, or are these different proposals in January?

The origin of the initial commitment to expand slots by 200,000 as part of the 2021 Budget act?

Last year's right. It was 257 million dollars in 2021-22. I'm reading in the LAO's report, 8800 new slots.

That is what so far, slots that have been filled and associated funding used to fill those new slots? That's correct.

Okay. All right. I'll stop there. Thank you.

Okay, Mr. Fong.

Thank you so much, Mr. Chairman.

And just real quick, Mr. Alvarez, on the slots. We're going to get to that in a little bit later as well, so we'll get in more detail about that. Mr. Fong,

Thank you so much, Mr. Chairman.

And thank you to all our speakers and to everyone for providing the updates on the relief policies. In terms of the COVID relief activities, including the childcare relief stipends, the supplemental rates, the family fee waivers. We've heard a number of concerns on that. This question is to the Department of Finance. Has the Administration considered extending some or all of the relief policies?

Thank you for the question. Gabby Santoro, Department of Finance the Governor's Budget does not reflect a proposal to extend these relief efforts at this time.

Is there any additional opportunities? I know you mentioned different, as Mr. Alvarez has referenced, different funding for different childcare slots going forward and some of the backfill, but in terms of some of the policies regarding this, is there any potential conversations to see if we can extend some of these relief policies?

We are happy to engage in conversations to consider. We just want to, for clarity that these are not reflected in the Governor's Budget proposals.

Okay. I think we got to continue to look at different opportunities around different rates and fee waivers and other opportunities to continue to support these opportunities here. So thank you. Thank you, Mr. Chair.

Okay. Thank you. I wanted to ask about the family fees. I would assume it's different regionally. So do we have any examples of what. Can you give us a couple hypotheticals across California, how they would differ?

When you're referring. Oh, I'm sorry. Dr. Lupe Jaime-Mileham, Deputy Director for the Childcare and Development division for CDSS. When you're referring to the difference in regards to regionally, are you referring to copayments or family fees?

How about both? Do you have any hypotheticals? Top of your head.

So, hypotheticals? No. The reason for that is a couple of things. One is, in terms of copayments. Copayments is the, let me first start by just speaking about what that is. So that means that the voucher amount is not enough to cover the full cost for the provider. So therefore, the parent now has a copayment. Right. For that difference. And so the Department currently does not collect data in regards to the copayment across the state. So we're not able to.

How about family fees?

Now, in terms of family fees, the data that I do have on that is we pulled data from previous, from the pandemic to see how many parents were paying family fees prior to that. And we found that there was an average of about 26% of families on CCDF. So on subsidies programs through CDSS, were paying a family fee. And that could range from, depending on the income. Right. So up to the 10% being the max.

Yeah. So I'm just curious, based upon that, the quarter that paid it, do you have any examples from, like, San Diego to the bay to Sacramento, just to kind of paint a picture of how they would differ regionally? if you don't, that's okay. You can get back to us.

Exactly. Let me get back to you on that.

Thank you. And then one issue is we certainly have a childcare crunch across California, and not to mention the slots. Unfortunately, we're not able to expand, even though there are families that could benefit. And we heard about this from one of our witnesses. What would happen if we reinstituted family fees? And so many people who are living on the margins weren't able to pay that fee, what would enrollment look like in California? Anybody could answer.

So, looking back anecdotally of different information that we have, let me introduce myself again, Lupe Jaime-Mileham, Deputy Director of Childcare Development division. So we've heard anecdotally a range, and I think Andrea also spoke to this, too. In regards to that, It ranges from families had shared with us that the family fee is going to be difficult. Right. It is going to cause a financial impact.

However, we have also heard that a fee is sometimes more doable than an individual tuition in regards to whether you're paying childcare directly out of pocket. So that's one anecdotal piece. However, we do want to recognize also that there is going to be a financial impact in regards to family fee, taking into account the inflation.

We are aware, as talking to our ACF partners through the feds, that the family fee is something that CCDFF, in order for us to maintain our funding, we need to have a family fee structure in place. So waiving the entire fees for everyone one more year would not be allowable based on our federal funding.

Yeah, and I know that we have a proposal that Assembly Member Reyes is putting forward. It would have a family fee of 1%. And I'm not advocating this, I helped get rid of the family fees the last few years, but just, we have 500,000, roughly, people in California subsidized childcare. If we brought back 7% family fees, which I don't want to see happen, what would happen? Paint me a picture. Would we lose a third of families with 20%? Would half, would it trigger crater by 80%?

Does anybody have any opinion on what would happen if that draconian effort went forward?

Andrea Fernandez, California Children's Academy. And according to the data that we've collected, we've surveyed families that receive subsidized care across California. Part of it was through Every Child California. And over 7,000 families responded. And 55.9% of them, over half have already said they would drop out of care, that they could not afford it, and it would devastate their families.

Yeah. So I think that's an important reminder that may have more negative impact than thought if we reinstitute them on those levels. What's an acceptable family fee? I know Ms. Reyes has an idea of 1%. I know President Biden, his proposal saying that people should pay no more than 7% of their income for childcare. Granted people on the margins, and super low income 7% is more than some families. So what is the appropriate percentage that people should pay for family fees.

Andrea Fernandez again, California Children's Academy. As someone who used to pay a family fee for my childcare, knowing that there is a federal expectation as part of our funding, I would agree with Dr. Lupe Jaime of that 1% because our families cannot afford the basic necessities as it is. We've heard over and over again, I can't afford to pay my rent. I can't afford to put food on the table, diapers, formula. They're depending on us to help subsidize them for these needs.

So even adding a 1% would still be unattainable for families without additional support from programs and subsidies in California.

Okay, thank you. This certainly is an important topic, and I know a lot of Members have strong opinions on this. Yes, Mr. Alvarez.

Thee news to me was the requirement on the Federal Government for fees. What is the exact requirement?

And I can send you the regs behind this also. Yeah, but the requirement is that we have to have a family fee structure.

That's all it says is a structure. Okay, thank you.

Which is why there's proposals to have a fee, but like a nominal fee. Yeah. Okay. We will hold this issue open, and I know we'll come back to this and have some type of action later in the year. Issue number three, childcare funding rates, reform and January budget proposal. We'll have Social Services start us off, then DOF, LAO, CDE, and CCPU again, and then the ECE Coalition. Dr. Jaime, you want to lead us off?

Good morning. I'm Dr. Lupe Jaime Mileham, and I'm the Deputy Director for the Childcare and Development Division. And I'm going to provide some opening statements in regards to issue three. So the Governor's Budget includes 6.6 billion in total funds to support childcare programs for 23-24. As a point of reference, 10 years ago, the total funding to support childcare programs, in 13-14, was 1.7 billion. And so you can see the significant difference there.

Our focus continues to be to stabilize the field and address inequities in the current system. For example, investments addressing rates, such as implementing of a new ceiling of a 2018 regional market rate at the 75th percentile and numerous one time stipends are examples of this. The Governor also proposed the budget that included a 8.14 COLA, and this also helped shift and allowed us for next steps in regards to rate reform altogether.

As a reminder, as we go into some highlights in regards to some of the work that we've done in this last year regarding the rate reform, we convened with the consultation of RCD partners rate and quality workgroup, and some of those highlights of that workgroup was to ensure equity as a fundamental for all change, replace the current methodology of using the price survey to set rates with the alternative methodology, which uses a cost estimate model to set base rates to create a single rate structure, and then, of course, continuing the evaluation of this work.

As a step two of this, the joint labor management Committee also met in regards to rate reform, took those recommendations, and continued to take it one step further. Where the recommendation was the single rate structure that included an alternative methodology looking at the true cost of care.

It included a base rate, incentives and enhancements using a setting matrix evaluation of the structure. And then it also looked at current state and federal requirements, everything based on equity in regards to this work, and then continuing to support an alternative methodology approach and.

And with this opening, I will also mention that Ms. Gabby Santoro from the Department of Finance is available to answer more specific questions outlined in the agenda. Of course, our Director Johnson and Chief Deputy Troia may also be assisting with answering any further questions, as well as myself. Thank you.

Okay, next speaker please.

Gabby Santoro, Department of Finance. As Dr. Jaime-Mileham had mentioned, I'm available to assist with answering any questions. Thank you.

Jackie Barocio with the Legislative Analyst Office. Starting on page 14 of the agenda, it outlines our comments related to the cost-of-living adjustment, or COLA, that's included in the Governor's Budget, which is the only budget proposal that impacts rates at this time. The COLA is estimated to be 8.13% in 23-24 and would apply to providers in both the general childcare and alternative payment program.

In our analysis of the COLA cost estimate, we found that in the case of the general childcare provider COLA, the Governor's Budget overestimates cost by about 120 million. This is because the cost estimate was calculated as if all general childcare providers would receive a COLA to their rates, when in reality per statute, only general care providers that receive the standard reimbursement rate would benefit from the COLA.

Also in our analysis, we mentioned how for alternative payment agencies, the COLA would not apply to their rates, but rather would result in a total funding increase, which essentially operates like a slot increase.

And then one thing we would flag is that structuring the alternative payment COLA this way as a slot increase would run at odds with the rationale behind the governor's proposed delay in the scheduled slot increase, given that it seems that providers need more time to catch up and fill the new slots that have been added over the last two years. So overall, as outlined on page 15 of the agenda, there are many ways in which the Legislature could structure the COLA.

For example, it could provide an across the board rate increase, the benefit being that all providers would get some assistance to address inflationary pressures, but then also the trade-off being that you would forego any possible general fund savings. As I mentioned before, other ways you could structure it is use the funds to reduce the gap between the regional market rate and the standard reimbursement rate. You could also redirect the COLA funds for other childcare program priorities.

Lastly, an option is to forego the COLA altogether and score the general fund savings in light of broader budget problems. However, the trade off of this would be that providers would not receive any assistance to help address any inflationary pressures. In terms of what we can expect in May, we do expect to see a revised COLA cost estimate from the Administration, but then also a revised COLA percentage as well. Thank you.

Okay, next speaker, please.

Thank you so much, Mr. Chair. Virginia Early with the California Department of Education. So, as other panelists have mentioned, rates are really key for the sustainability of our programs, and they're also a key element of equity since the majority of the workforce is woman of color. As Dr. Jaime-Mileham mentioned, we provided consultation at CDE to DSS as part of the rate and quality workgroup, which explored the idea of determining rates based on the costs of meeting requirements, including program quality requirements, rather than what families can afford.

Data was collected as part of this workgroup that really revealed that not only are rates not aligned with the market, but they're significantly lower than the true cost of care in California. While the state works on the next steps from the sword group that DSS mentioned, the regional market rate survey data does remain a measure of equity across counties that, while imperfect, is the best proxy we have at the moment to capture regional cost variations.

So, by way of background, the RMR survey essentially captures the distribution of prices in counties across the state. And so the certain percentiles mean that, say, the 75th percentile means that that's a rate that 75% of the providers in that county charge that rate, or something less. So it sort of captures those regional variations.

One thing, as the LAO mentioned, that while many CSPP programs receive rate increases January 1 when they switch to the regional market rate, last year's COLA only went to low cost counties rather than high cost counties, and specifically 15 counties in California. And about over half of our contractors did not receive a COLA increase. So while other counties increased their percentile. And so our contractors shared that not receiving a cost of living adjustment in a year with high inflation was really quite a burden for them.

The Governor's Budget proposal, as LAO mentioned, will essentially repeat the same process for this year, and similarly, about 12 counties would not receive an increase, and that includes counties like Alameda and San Diego. So in order to address the recommendation to address these challenges, we'd echo the recommendations that LAO said our preference would be to allocate the funds for rates and COLA to increase sort of the floor line percentile based on the RMR survey.

If that's not something that is a preference, I think our second choice would be an across the board rate increase for every county. And similarly, I think the LAO also has mentioned that there's some appropriation for rates, funding from past increases that CDE does not currently have the authority to actually allocate as rates, and we're asking for that authority.

When we look at rates, we know that they're really essential because they allow programs to pay higher wages to their force, to their workforce, keep staff in the profession, and it also addresses access because many programs are telling us that they can't fill their classrooms because they don't have sufficient teachers in order to staff those classrooms. Thank you so much for your time and attention, and happy to answer questions at the appropriate time.

Okay, next speaker, please.

Thank you. Kimberly Rosenberger, CCPU. So, as noted, the recommendation that came out of the JLMC with the state was for an alternative methodology that looks at the actual cost and moves away from a fixed price.

And it takes into consideration the actual cost analysis of a business expense, food, diapers, transportation, insurance, portions of mortgage or rent, location and economies of scale, which we think is really crucial in understanding why we need to move to this cost of care and why we're not seeing enough workers serving the slots that we have financed. It's because in childcare deserts, family childcare providers are usually the first to pop up, but they operate on really small economies of scale.

So that cost is spread out over fewer children, which means that they need greater initial dollars to start up. Because right now we're working off of a 2018 RMR, which we know the price points in 2018 versus post pandemic are significant, and we're only at 75% of that RMR. New businesses aren't opening, we just heard 1900 left this month the childcare workforce. It's because we're only funding at 25% to 30% of the cost. It's not sustainable.

There is urgency to it, and we do think that simply funding them until we can catch up isn't going to address the issue. We do need to implement this cost of care with urgency. We think that there's different ways we can approach this to do so in the immediate when we have our contract, as noted, expires June 23. Again, I would like to reiterate that CCPU has ability to bargain for family, friends and neighbors, exempt and license family childcare centers in voucher network programs only.

But we're in the conversation in partnership with our ECE and the Legislature. The Legislature absolutely can have conversations around the rate, have conversations around how we implement cost of care in the immediate until we can then go to the feds with our new state contract. So we don't think that delaying till December 2024, the conversation is the smartest approach for a failing infrastructure where we're seeing workforce leave on the daily. So our recommendation is that we do shift.

It would have a base rate, the study, it would influence but not set that. That's what the Legislature and bargaining would do, would set that base rate, and then on top of that would be that additional funding that takes into consideration economies of scale, takes into consideration additional business needs and has flexibility and can shift instead of being tethered to one regional market rate. While the Federal Government does require that survey, it doesn't require that survey dictate the terms of how we pay our care workforce.

And we think that is the most important factor that came out of that JLMC recommendation. I'm happy to talk more about the cost of care model, our reasons for supporting it, but at the end of the day, we think it has the most equitable approach. It's easier for the Legislature to fund without getting tethered to bargaining and being blocked out of the conversation, and it's more responsive in real time. Thank you.

Okay, thank you. Lastly, the ECE Coalition.

Hi. Greetings, Assemblymember McCarty and members of the Committee. I am Dr. LaWanda Wesley, the Director of Government Relations for Childcare Resource Center. I am representing today the ECE Coalition. We are a member organization that comprised of 34 organizations that advocate for state budget investments and policies that promote equity by serving the highest need children. First, we are informed by current research and promising practices.

The ECE Coalition up front is asking for a 25% increase to the current rates for the immediate relief in adopting a cost estimation model, much of which was mentioned already today. This cost estimation model is to include a timeline for implementation for the actual cost of care based on program enrollment without charging families a fee. We also are asking and requesting that the 20,000 childcare spaces scheduled to be released for 23-24 be allocated. What is the ECE coalition asking for? I'm glad that you ask.

I'll briefly describe that by going over the context for rate reform, cost drivers for providers and then cost drivers for families. Just quickly as we think about the history of rate reform, over the past 10 years, a legislator has debated the move to a single rate system. So this is very much a familiar issue to all.

In 2021, the budget required the Department of Social Services to convene the rate and quality workgroup to make recommendations about shifting from our current bifurcated and inequitable rate system to a new single rate for all providers based on the cost estimation model. This reflects the economic diversity of California. Much of what you heard today is that we want to make sure that we keep a diverse workforce, so shifting to this model would allow for that.

In terms of cross drivers for providers, across the state, providers are facing dire financial challenges due to the current reimbursement rates. Again, much of what we already heard here today. The current rates used to pay providers are based on 2018 regional market rate survey. Interestingly enough, it's sourced from 2016, so you could sit with that for a minute. It does not meet the cost of sustaining a business in 2023. As of 2023, the cross drivers for both providers and parents are impact-- They're impacted by inflation.

In particular, for providers, the staff cost has gone up by 29%, gas has increased by 50%, milk has increased by 45%, eggs have increased by 70%, baby formula up by 51% and wipes are up by-- baby wipes are up by 33%. As a result, today there are childcare, preschool and Head Start centers with empty classrooms. Sometimes we refer to these as dark classrooms.

It's not because there aren't a lack of families who need the care, but rather because the center cannot find staff willing to work for low wages offered because of the current low reimbursement rate. In some areas of California, the providers are so short staff they must close down for a day when the teacher calls in sick, leaving families scrambling to find care or forcing parents to stay at home from work.

In some counties, ECE workforce makes up so little that over 50% of them are relying on some other form of subsidy in the form of HUD housing, CalFresh, Medi-Cal. So basically you have those who are families who are receiving subsidy for childcare. The workforce themselves are also receiving a form of subsidy. As we have highlighted over the last few years, providers are leaving the ECE field for better wages, such as In-N-Out.

And I just want to put a pin that all work is meaningful even if it is In-N-Out. But you have a highly skilled workforce leaving for these jobs. Our antiquated rate system does not disperse resources evenly and lags behind the actual cost of care. Providers cannot wait another year to receive rate increases without harming California's ECE system. Children and families across the state, they deserve a livable wage. And I know this all too much because I was that preschool teacher.

I also was the mother receiving subsidized care for her five children. We know other sectors have received increases to their wages such as IHSS and other K through 12 partners. So we don't want to come back here every two years asking for the same thing. As I think about our families, California needs a rate system that covers the cost of care.

The new rate system must include the full cost of care, eliminating the need to charge families for those making below 75% of the state median income. This change will make a real difference in working families currently paying fees, putting money back in their pockets I will actually skip some of my remarks, but I do want to raise up this data point.

To give some context to other states, in particular, a family in South Dakota who's earning $5,000 with a family size of four, similar to in California, are paying $46 a month of state median income and that represents 62% as compared to here in California, we are paying same family size, $363 a month, representing 53% of state median income. As I close, I would like to say additionally, childcare providers are paid based on attendance. When a child becomes ill, they stay home, greatly impacting attendance and provider's ability to pay for their overhead.

To put this in perspective, or according to the American Academy for Pediatrics, young children in childcare settings have eight to 12 more codes a year compared to those at home. So when you're not paying based on attendance or paying based on enrollment, and you pay on attendance, you're going to see our providers will see a lower reimbursement. In closing, I would like to highlight the impact of waiving childcare family fees.

The waiving of fees for the past two years has offered some relief, as noted here by some of our members from the earlier panel and those who are with me now. By continuing to waive family fees, the state will provide important stability and certainly for families in childcare programs.

And I close, I can't imagine what it would be like if I was still that single mom with children all under the age of 10 needing to try to figure out whether I put gas in my car or buy food. These are important decisions as a parent that was here earlier are trying to make, and this is what we're trying to eliminate. Thank you for your time and I'll stay for any questions you may have.

Okay, thank you. Questions, Committee Members? I'll start out. As I said at the outset, this is a key piece of our puzzle in early learning and care. In know you can't expand access through universal TK and expanded slots without looking at the reimbursement rate for our care systems in California. And I just think the big picture. I know this boils down to finance and dollars and budgets, but like our schools, which have the same expenses, people costs, eggs costs, gas costs, utility costs.

We had a COLA this year of about eight and a half percent proposed, last year, LCFF on our proportional roughly, COLA was 13%. In 2021 is about 5%. So that's just over 25%. So to say that they make a compelling argument because their costs are going up, but the cost for this thing over here that deals with kids but littler kids doesn't have the same cost going up, just doesn't make sense. And so, one, we need to recognize that these costs are legit.

And two, that on our next item, issue number four, slots, and it had an amazing win two years ago to greenlight 200,000 new slots. But because of a variety of reasons, including not having the adequate reimbursement rates, that promise is not meaningless, but it falls short because they don't pencil out without the adequate costs. And then, as we know, too, that the workers in these fields--

I was talking to Mr. Ting the other day, he was saying in Tahoe that you can work at Taco Bell and make 30 bucks an hour now.

With benefits.

$30 an hour. So why would you go work to make a beautiful little three year old when you can make a beautiful burrito supreme for double the pay? So people are rational, they make choices, and we help them make their choices, and we provide a disincentive to do things like focusing on our little kids in California. So this know, kind of shame on us too, that we need to step it up here, you know, I know that it's not know Department of Finance are stingy.

Money doesn't grow on trees. But we have other things like the slots, and we're not utilizing them. So could know focus on rates and a trade off on that thing. So maybe that's a question for LAO to help us figure out that while we would want slots and rates, if we're not doing slots right now and we're not spending that, could we do at least some of the rates to make those slot increases more valuable? I don't really have any questions for Department of Finance.

Okay. Thank you. So with that, we will certainly put this issue on our to do list and come back at a later time. Issue number four. We will focus on the aforementioned slots childcare access. This oversight in January proposals we have. Okay, we'll start again with DSS and Dr. Jaime-Mileham. How do you say it?

Mileham

Sorry. Dr. Jaime-Mileham. Okay, please proceed.

Thank you.

So again, good morning, everyone. Dr. Lupe Jaime-Mileham, deputy director for the childcare and development division. So I have some opening notes in regards to issue four. Since fiscal year 21-22 an estimated 1.6 billion has been invested in childcare slots. In response to the alternative payment program feedback that we received in fiscal 22-23 we invested 20 million in a one time capacity grant to support activities, including the increase of childcare enrollment, giving the unprecedented of the slots expansion.

While we anticipate that all the additional slots are needed and will be utilized, we also recognize that given the historic levels of the increases, it is taking more time than anticipated to complete the necessary process to increase the slots. As agreed the 21-22 budget agreement, the governor and the legislator agreed to add the 200,000 new childcare subsidy slots,

working towards that as a goal. The increase in slots over the last two years have more than double the number of the alternate payment and general childcare slots. So let's see here. I'm going to pause with the rest of my opening just to make sure we have time for the panelists.

But please know that I am here more than happy to answer questions. And we're also going to have from Department of Finance Ms. Diana Dominguez, that i1s also available to answer questions.

Okay.

And then again, Chief Deputy Troya and Director Johnson is also available.

All right, thank you.

Jackie Barocio with the LAO. With regards to the proposed delay in the slot expansion plan by one year, we find that that seems reasonable, both given the projected state budget problem, but then also, as noted by DSS, just the need for more time to fill all 146,500 new slots that have been added over the last two years.

Additionally, as noted in your agenda starting on page 21, there were a few questions we've been working on with the Department of Social Services to get an update and a better understanding of childcare expenditure levels. The first question was related to how the Governor's Budget allocates over 5 billion in federal relief funds. And in our conversations we were able to get back up.

And what was identified is that at this time, at least 57 million in federal relief funds that were initially allocated to cover rate increase cost may not be spent by September 2023. And similarly, as noted in the prior panel by the Department of Education, there's also an additional 112 million in unspent federal relief funds that were intended to cover rate increase costs that also are at risk of going unspent.

Thus, the Legislature may want to ask the administration if these funds can be redirected to another activity, and if so, how quickly would we need to act in redirecting these funds to ensure that they are spent by September 2023? The second question that's outlined in the agenda is getting a better understanding of the amount of additional federal funds or general funds that could be freed up in the current year due to the slower than expected slot utilization rates.

Our understanding is that in May we should expect to see revised cost estimates to both reflect the timeline, the actual timeline in which funds will be released to direct contract providers, but then also the lower than expected slot utilization levels. So to just give you a sense of magnitude, in January, we did estimate that to the extent that the current year budget reflected the actual timeline in which awards are released, that in and of itself could free up as much as $800 million.

There's a question of how that would be split up again across General Fund and Federal Fund. However, it's also possible that this amount could be higher because our understanding is that the first round of applications was not enough to fully award all the dollars, and DSS is currently going through a second round of applications. The last question outlined in your agenda, what we were trying to get clarity on is the Fund source for the backfill of federal relief funds.

Specifically, we noticed that when it comes to costs associated with rate increases and slot increases, those are ongoing costs that we did use temporary federal relief funds to offset. The budget. However, maintained General Fund and Federal Fund levels for those two commitments flat, where we should have expected to see at least a drop in federal funds to reflect an expiration of those dollars and a corresponding increase in general funds.

In our conversations with the department, it's our understanding that as a part of may revision, we will see that adjustment to Federal Fund levels to reflect the expiration of federal funds, but then also an attempt to backfill those losses with other federal funds. Additionally, the administration it's our understanding that the intent is to keep General Fund levels flat, to continue to keep General Fund levels flat year to year.

That would be possible if there is enough federal funds that have been identified to kind of delay the need for general funds to backfill those losses. However, in the situation where there aren't enough other federal funds to do that backfill, then there would be a need to increase general funds relative to what is currently included in the January budget.

Thus, the legislature may want to ask the administration one the likelihood that there would be enough federal funds that could be freed up in the current year to avoid the need of a General Fund backfill in the budget year. If there aren't enough funds identified in other fund sources, then would the administration propose to increase General Fund in the budget year above what is currently included in the January budget to ensure that enough funding is appropriated to fully maintain the rate increase and the slot increases? Thank you.

Okay, thank you. Next speaker, please.

Kimberly Rosenberger with CCPU. We were disappointed to see the pause in the slots.

We leave money on the table every year from federal dollars that aren't being utilized towards slots because we aren't serving the areas determined, especially childcare deserts, which is one of the reasons why we do think that the quicker we can move to the cost of care model, the quicker we can scale up the workforce in those childcare deserts, especially since they can address the need in a little bit more of a nimble fashion.

We do want to note that we think that the takeup can't go unnoticed, that it was also delayed by six months. So it's hard for the takeup to be met when half of the year it's not accessible.

Okay, thank you. Next speaker.

Lara Magnusdottir, I'm a public policy director at the Community Childcare Council of Sonoma County, or 4C's. We are a multi service agency that has alternative payment, contract, resource and referral. We run 13 state subsidized preschools and we have a food program in three counties. And I'm going to speak about the uptake of the slots from the perspective of alternative payment contractor.

So what's been talked about is that the program, with these planned additional 200,000 slots, the program is basically tripling from what it was before, which is a good problem to have, obviously, but our delivery system has been challenged in multiple ways in the past few years. It's talked about here before that our funding is based on a percentage of the overall contract. After the great Recession, the percentage that we receive for administering the program was decreased from 19% to 17.5%.

So down to basically the bare bones of what it takes to administer the contract. And that is where we have remained since then. So this funding mechanism, it means that when there's a COLA, the overall contract amount increases but not the amount per enrollment that we as contractors receive during COVID The state acted very quickly, for which we are very grateful to serve essential workers with subsidized childcare.

There were numerous and rapid program adjustments and changes, which were generally issued a few months at a time and then maybe extended, maybe not, which means that we had to touch every family multiple times with each extension and a programmatic change. And this was a very exciting but very challenging time for our agencies. And whereas so many others, we were in reactive survival mode, which we very much would like to get out of at this point. We have been in that for a long time.

In January of last year, the provider rates were increased, which again is a good problem to have. But that also means for our agencies that we have to go back and touch every single family and every child and send out communication to all of these people. And so we have to set aside a few weeks just to get this work done.

Also, in January 2022 is when the first round of the increased funding allocated, and it was allocated in July of 2021, and we received it in January of 2022. So it took six months to trickle down. I am proud to share that even with these challenges, our agency more than doubled the number of new children that we enrolled in the alternative payment program to 626 during the year from 311 during the previous year.

But that also meant that we had to staff up, which was not easy. We could not begin to staff up until we had the funds in hand, which was six months late. Training a case manager to be able to complete one of these enrollments takes months because this program is very complicated, we've had to restructure our teams as we have grown, adding support, training resources, equipment, furniture and space.

We are currently using conference rooms as offices, and we are scheduling mass open enrollment days where we are asking people not involved in the enrollment to stay at home so we can use the space to meet with family. So we're being scrappy and creative. So the point here is that the train has left the station in terms of we are getting ready to do these enrollments. We have done all the work.

And so from the contractor perspective, we would definitely like to continue that because once you stop, it takes a while to get going again. Right.

And the need is out there, as we know. Lastly, this program does not work in isolation. As we are enrolling families, they must have a childcare provider to serve the families, and I'm concerned that ARPA funding they allocated for the care initiative project to recruit new licensed family care providers and they tend to be providers of choice for families needing care outside regular business hours and for infants and toddlers.

That funding is sunsetting in June of this year, so we need to work in tandem in increasing funding for slots, but also have the providers to be able to take care of these children. We can't do this in isolation. And in the same vein, general childcare slots for infants and toddlers are sorely needed. Families are truly desperate for care for infants and toddlers and at this time of TK expansion and huge structural changes, many state preschool providers find themselves pivoting to serve younger children.

And so we need to really have some flexibility in these contracts to be able to change between contracts. So much appreciated. Thank you.

Thank you very much. Next speaker, please.

Good morning. My name is Michelle Graham. I'm the CEO for Children's Resource and Referral of Santa Barbara County. Our agency has been lifting up the needs for working families for over 50 years in our community. I've been asked to share with you some input on the state's goal to serve 200,000 new children in childcare by 25-26. Let me start by saying the goal of adding a total of 200,000 new slots is admirable.

However, we need 10 times that amount to truly meet the need of supporting income eligible children with access to childcare. Prior to COVID, over 2 million income eligible children from birth to 13 years had no access to childcare. Due to low reimbursement rates, licensing delays and expansion of TK, we continue to see family childcare, home providers and centers continuing to shutter on the front lines. With the expansion of universal TK, we are seeing closures of private childcare. Businesses who have served four year olds.

Many that have closed were also providing infant and toddler care. However, after doing the math and by losing the four year olds faced with the licensing regulations and lower adult to child ratios to serve infant toddlers, the numbers simply do not make sense. Let me provide you with some data from my agency specific to our cap contract. Since 2020, children's resource and referral has more than tripled the number of childcare voucher slots, from roughly 250 a month to 865 per month.

Children's resource and referral overall voucher budget has grown from 3.35 million to a projected of 10.6 million for 22-23. In nearly every category of care, there exists a childcare desert within. The demand for space far outpasses local capacity. In Santa Barbara County for infants, there is roughly one slot for every six children and preschool there is one slot for every two children due to loss of licensed family childcare homes and centers, we are seeing a greater shift to use the family, friend and neighbor care.

Currently we are using 65% of our slots with license exempt. In terms of infrastructure, your agenda captures adequately the funding that has been distributed to family childcare providers and centers, grants to retrofit and build new childcare capacity, enhanced website funding and 20 million for Alternative Payment Programs. However, here we have some challenges my agency and others across California are facing. For all intents and purposes, we desperately needed startup dollars to support the massive growth over the past three years, yet no funding was provided to agencies.

Although we have more than tripled the number of childcare slots. Funding for agency is solely based on the payment made to providers. To help highlight the funding concerns, let me provide you some very specific background on this issue. 60% to 70% of families that apply for a childcare voucher will not complete the eligibility process or will be determined ineligible.

The work staff performed to support families through the eligibility application process is completely unfunded if the family does not complete the process or if they are deemed ineligible. Once a family is determined eligible, it often could take 30 to 90 days for them to secure a childcare provider. Once the childcare provider is chosen and childcare services begin, it will be another 30 days before the agency will then begin to receive the reimbursement for the family.

However, the agency will have already made the childcare payments to the provider prior to receiving state dollars, this creating a monthly fiscal burden on the agency. For smaller agencies like mine, the next step is to borrow from either an agency reserve or more often to borrow from the bank line of credit to make this timely payment each month for the providers carrying the debt of the state until reimbursement is received. Now moving on to enrollment issues for my agency.

Although in cab we now serve more than three times the number of children we had pre COVID, we still have 850 eligible families on our waitlist needing childcare. We have fully enrolled 22-23 cap contract. However, we could continue to enroll and serve even more children and families immediately if we had funding. We have requested increased dollars to continue cap enrollment as these dollars could be immediately used. Yet it is very challenging to secure additional monies even though they are going unspent by other agencies.

Kappa, the statewide organization that supports us, has real time input from programs of unspent monies and agencies in need. However, the process to move those dollars is very cumbersome and not flexible to the real world needs of our field. The Governor's Budget proposes a delay in new slots. Candidly, there should be no delay in releasing new slots. Working families in California are in dire need to access them.

However, what I would like to be considered look at the calculations for distribution of SOTs, evaluate the agencies that are doing the enrollment and can do more. If funding were immediately available, then move the funds. Secure real world input on the time frame it takes to enroll an income eligible family into a new slot. For instance, in fiscal year 22-23 the agencies were informed how many new slots we would receive in September of 2022.

However, agencies did not receive monies to actually enroll the new slots until later in November. What that means is if the new dollars came in November and it takes 30 to 90 days to enroll and secure childcare, a child sitting in a new slot would not actually be realized until February or March 2023. If agencies had fully enrolled all slots, the way the contract works, that would mean that they would come July 1, 2023. They would start the new fiscal year.

All contractors would be overearned a few last points I'd like to address. We have heard that the workforce has been majorly impacted and it has. However, in Santa Barbara County I have over 100 people on a waitlist desiring support to start up their own family, childcare, home, business. The amount of state funding for this work only allows me to support eight per year. With additional local grants, I am able to increase this to about 30 a year, but we need more spaces.

Additionally, the fact that agencies have not used up all their cap slots is not a reflection that slots aren't needed. It should demonstrate the lack of funding. Agencies have had to be able to process eligibility enrollment and provide casework for the increase in families served. Without startup dollars for eligibility, enrollment, training, office space and equipment, agencies are left overwhelmed and underspent at no fault of their own.

At CNR Children's Resource and referral, we have made the sacrifice for salaried staff to work far beyond a 40 hours work week and hourly staff being paid overtime when mass enrollment has been possible. Under issue two, it was asked the issue if we reverted back to reimbursed providers based on enrollment versus attendance, what would be the impact? Bottom line, it will result in children currently enrolled in stable childcare possibly being disenrolled.

Providers don't have the resources to cover the loss of reimbursement if a child does not show up for care and furthermore, this is a typical practice for private pay programs. Additionally, in regard to issue two on family fee, in Santa Barbara County, when we had family fees. I remember fondly a family who had to drop their childcare because of a $30 family fee.

Disenrolling three children, bringing these children back to the agriculture fields where they worked to wait in the car as the parents worked all day. This is only one example, but there are many more families that would find themselves in great crisis. Finally one point I'd like to touch on is the use of allocated COLAs when they are included in the budget. The only thing we can use those COLAs for is purchasing new childcare slots.

However, we would appreciate consideration that any COLA allocated to us be allowed by the agency to support the work needed to enroll and serve families. I am confident that had we been able to use past COLAs in this way, more families would have been enrolled across the State of California. Thank you.

Okay. Thank you. Finally, we have Christina Garcia from Parent Voices.

Hello, my name is Christina Garcia. I come to you from the unceded coast, Mewk land, also known as Marin County. I'm a mother of four. My youngest will turn three this June. My twins are seven and my oldest is 17. I'm a first generation college graduate with an associates. My parents didn't manage to finish high school.

I've struggled to remain housed and provide for my family in a county that's not designed for me as a woman of color, a native one, specifically, access to quality childcare is so critical in supporting families, especially BIPOC families. Today, I'm here representing the families who have benefited from the recent childcare subsidy investments. And I'm serving as a voice for the others who are probably sitting, praying nightly to get access to this affordable childcare. And this fate rests in your hands.

I first got on the childcare waitlist when my twins were babies. I think it was 2016. That sounds about right. They didn't benefit from quality childcare when they were young. That time in my life, had I had access to these funds, I would have been able to leave an abusive relationship and continue my education. And it wouldn't have taken me four years had I gotten a call sooner. Waiting for childcare during the pandemic was one of the more challenging things I've ever had to walk through.

I had a newborn. I was struggling with postpartum depression. I had twins who were trying to do zoom kindergarten and a teenager who was almost suicidal and very mentally ill because of the isolation we were all in. Meanwhile, I was also in Zoom court getting a restraining order, and that was granted for five years. We were in survival mode during that time. I was able to complete my associates, I applied for scholarships and I was able to get my daughter into a preschool program.

I was then offered a job in the school district. I got some hope, but unfortunately my daughter got hand, foot and mouth, and I didn't have money for a sitter. So I had to leave the first job that I had gotten because I did not have the means to pay for care. Then last April, I got a call from the Marin Childcare Council, and I was offered a voucher for the three of my kids who still need it. My bank, it works and doesn't need care.

And this came just in time for me to transfer from the College of Marin, which I had just gotten my associates from, to Dominican University, where I am doing their adult degree program, to obtain a bachelor's and then apply for a teaching credential program. The need for BIPOC teachers in a natural shortage, I don't need to talk about it because we've all talked about that, but this is the end goal for me.

I plan on getting an EDD in educational leadership, mostly because I remember my own experiences in the school districts. Being a native who knew the histories that were being taught weren't accurate, I want to be that space for kids like myself. I didn't get teachers that looked like me. I didn't get principals that looked like me. I grew up in a very affluent, predominantly white community, and I would get in trouble when I'd call them out for saying things about the history.

I know what it's like to have my people not be seen. I think I mentioned I want to teach ethnic studies while I work on the EDD part. I'm a Pomo native mom, so I wrote all of this down so I wouldn't get lost in all of it because there's a lot to share. But the plan is to create generational wealth for my children and work in education. And in order to have financial security doing this, I'm going to need more than a bachelor's.

It won't be sufficient to have just a bachelor's. When I got my subsidy, it changed the history of Marin County. That sounds kind of outrageous saying that, but that's the truth. When I was able to get the subsidy and have some daytime hours to complete my studies and have more time available for my kids being in aftercare, I was able to step onto the board of the Marin Indian alliance in September.

Alongside that organization and community partners, we had the first ever in the entire county Pow Wow. That happened two days ago. You can see it in the IJ, if you're curious. I also stepped on to the diversity, equity and inclusion team because there were no brown women in those spaces where my kids go to elementary school. And from there, I pitched an idea in November for a district wide land acknowledgment, and that was just approved last Tuesday.

That will also turn into another pot of money and educational curriculum changes. Newsom did something with that. I don't know all the words for it at the moment. It's a lot, but those things wouldn't have happened without my voice. Without that subsidy, my county would look different. It's beginning to change. There's more indigenous visibility. It creates more equity. I also sit on the scholarship Committee at the College of Marin because I was the first student that had ever received funds for being native.

Those funds sat there for 20 years before I used them. So now I sit in their committees to help market them to other students and help students who are indigenous be able to get their enrollment if they're struggling. Trying to figure that out so that more kids can do what they need to do with their education.

All these things that happened in the last six months to uplift other BIPOC people in my community wouldn't have happened without the subsidy, or I wouldn't be able to continue if I have to pay that family fee. I can't continue on the path that I'm on without equitable, affordable access to childcare. I'm looking to you, the budget subcommitee in education, to do the right thing, rejecting the proposal to delay the families who are waiting for their chance and to pay the childcare providers an affordable wage.

I cannot read my own writing. I got a little excited here. Most importantly, we need to give the children who are in early education the opportunity to have that experience where at least for my daughter, I can speak to her preschool. They learn things like, she touches her face and she goes, I'm beautiful. I'm smart. I'm strong. She gets skills in meditation, how to regulate her body, that she comes home showing us, and I'm like, you're not even three. How do you do this?

Her language has flourished more than any of my kids. I'm a mom of four. I watched this a few times. Access to this kind of care has changed this little girl's brain development in a time where we were concerned, because we were at home with the pandemic, many of these families that are waiting for slots could be first generation college graduates like myself. They could be more survivors of domestic violence. They could be disabled people. They could be addicts wanting to get sober.

We just don't know all of it. But I will say that most of these families do face structural racism, sexism, and this is a way to change those narratives for everybody far and wide. Thank you.

Thank you. Thank you for sharing your story. And coming up to the capitol, a couple questions first from committee members. No, I have questions for the Department of Finance. Can you walk us through how many of the slots have not been filled? I think on our agenda, we talk about how many we think were filled in the last two years. Roughly 45,000. Is that accurate, that there's roughly 100,000 unfilled?

Diana Dominguez, Department of Finance. We estimate that 35,800 slots have been filled, and that's of the 110,500 available at the moment. And that would mean that 74,000 are remaining to be filled.

Available of the 100,000. But if you're looking at the 146, it was roughly 100,000 unfilled.

Yes, that's correct, yeah.

So why do you think they're unfilled?

We do anticipate that the families will need to access these lots. However, we recognize the historic level of increases that has been placed on the Department of Social Services as well as the care field, and we recognize that it will take time.

So what do you think were the factors, why they were unfilled? Going back last two years, we funded a lot for new slots, and they were unfilled. So what do you think were the factors, from the administration's perspective, why they remained unfilled?

It has taken the Administration time to process new contracts, and that has affected the uptake of slots and ability to provide slots in the field.

Okay. Did you want to interject as well? Department of Social Services?

Yeah. Again, Dr. Lupe Jaime-Mileham, Deputy Director, Childcare and Development division. So as noted by our alternative payment partners, it did take some time, right. On July 1 of 2021, that is when CDSS had the transfer of these contracts to the Department of Social Services. So it's a historic moment at the time, took some time, of course, to ramp up regarding this new division, but at the same time, these were historic dollars.

So the division took, I want to say, until January to get the dollars out. Learned a lot, have to say that and understand that there is a lot of efficiencies that we now have in place to make sure that future dollars go out the door a lot quicker, such as this year. The other piece that was also said in regards to the panelists was that these were very different type of approaches.

For instance, there is one thing about enrolling families based on attrition, which you have your operations ready to handle. However, being able to triple slots does require time, does require recalibrating, does require relooking at your current pieces. The cap dollars themselves are two years in order for these dollars to be fully utilized. It's a two year contract. Some of our contracts go year to year. This one in particular is two years.

In our case, when we were looking at data from our fiscal analysts, I believe we were looking at it maybe in November or so, we noticed that many of our contractors were still trying to enroll with the original cap $1, meaning the fiscal year 21-22.

So they haven't even touched that 22-23 dollars on top of that, we heard loud and clear in regards to the responsiveness of the admin not being enough, recognizing that families that are enrolled may not be able to go through the entire process. And that's where that 20 million one time startup funding that was released later was a big benefit of it. But there definitely was some key areas, so I want to just make sure we cover those.

Thank you. Mr. Ting?

Can I just follow up-- just to piggyback on the chair's question, which is, so is there not demand for the slots, or is it just that it's taking so long to process that we just don't have the ability to process all those slots?

That is the latter, right? So the demand is there, and I think you would hear that from the entire room and beyond. And that demand continues to be there. It is the ramp up time that is taking time to get these start ups.

Now that you've had a year and a half, what is your time frame to process these contracts and these slots?

As far as processing contracts, we're pleased to share that with fiscal year 22-23 we were able to get contracts out a lot sooner. That came out--

What's a lot sooner?

I was going to say, if I'm guessing, I'm remembering probably around September, October or so is when they received it. So that was three months, which is typical. So again, lots of learnings and we hope to continue to refine that.

Is there a backlog?

A backlog in regards to?

Requests or contracts?

So in terms of cap, all the dollars are out the door. So no backlog on that.

But there's still a number of unutilized slots.

That is correct. That is correct.

Sorry. If you're processing those contracts in three months, what's happening with the unutilized slots? Why are those slots unutilized?

So that is then when they leave our office to go to our alternate payment programs, then they are working on getting those enrollments completed. And that is where you do the group enrollments or doing different strategies to do that. But it takes time. It really does.

How much time?

It varies. And you know what? Let me pause and see if my fellow alternative payment partners would like to describe how long it takes.

It'd be good to get a range of time.

Yeah.

Thank you. I think there are several factors. One is we don't always have childcare providers ready to go, and so as quickly as we can enroll a family, and that can happen in the matter of hours. If everything worked perfectly, there's often no place for them to go. So children wait 30 to 90 days in order to secure a childcare provider. We have one slot for every six infants in Santa Barbara county and one slot for every two preschoolers. The need is there.

Enrolling is challenging, but as I shared in my testimony, we do mass enrollment, we do overtime, we do all it takes to make it happen. Not every agency has the same exact practices as each other, but the reality is we are all trying to do it. We're just trying to get there the best we can.

Lara Magnusdottir, 4Cs Sonoma. Another piece of it is that is the staffing piece, to be able to do the enrollments as had been described before. When we get a COLA, we don't get an increase in how much we get paid or how much we pay. We just enroll more families, right. And so there was a capacity grant that I believe was it December 2022? So we can't do anything to prepare for that until we have the funding on hand.

And so this is all starting to really gain momentum now to build up the capacity. It just takes a while to build up that capacity to do and training to do these enrollments. I would invite any of you to sit in an enrollment meeting and look at how these enrollments take place and the complexity and the paperwork that happens.

So it sounds like you were asked to do more work, but you weren't paid for it.

There was a capacity grant that we got, but that was allocated in December, last December.

December of 2022. So just three months ago?

They are paid per child. It's just they don't give the money until the child's enrolled.

Okay. Yeah. So I think that's kind of. It's like a little bit of a cart before the horse where there's a--

Oh, I see.

But it's the same amount per enrollment. When there's a COLA, we just get a bigger grant to enroll more families.

And we get the same percentage off of it. So the capacity grant was a huge help, but that is still a temporary band aid. It doesn't help with planning or projecting or working on stability going forwards, right?

Yes.

So what else do we need to do to assist? Because for us, a frustration is we know there's the need, we know there's demand for all these slots, and then all that comes back is all these slots are empty, empty, empty, empty. And to us, it doesn't make any sense because there's hundreds of thousands of--

It does take a while to ramp up. I think most of the agencies are in a position now where they can keep rolling and they can keep going. So stopping it now, it's like the train leaving the station. Like I said before, you stop it, and then it takes a while to ramp up again. But we also need more funding to be able to administer the programs and we need to have childcare providers to be able to run the program.

Yeah, but what I haven't heard, and again, I apologize for coming late to the panel. What I haven't heard is, okay, how many more slots can we enroll this year? How many more people can we enroll this year? I hear a lot of qualifiers. Many, most. A lot. I can't put any of those in a budget.

If I may. I think part of the earlier commentary was that the slot expansion was so great that they had to scale up, and then it was a six month delay to get that money out. I think my partners would agree that they're now more positioned to continue enrolling, and instead of allowing that growth to continue that everyone's been scaling up to, what's being proposed is to stop it and so undo all that process. So I know it's frustrating, but I--

So, the question is, what's the number? Are you telling me if we fought the governor's proposal, you could enroll everybody next year, or is it half? Is it 25%? Because here's why I'm asking. Because the money that goes to this, that sits idle, means kids don't get after school. It means there's no classroom support, or it means maybe there's not food because the money's been set aside and not doing anything what it's supposed to be.

The money is supposed to be going to childcare, and it's not. It's sitting in a bank account in the state budget, which is not where it's supposed to be. Hey, I appreciate all the snapping, but this is a budget hearing. It's not a sporting event. So I really appreciate everybody-- You can wave your hands. It's wonderful. So really appreciate that. We could all do the fan waves. Awesome. But please, no snap in or applause and all that sort of stuff. So I appreciate that.

But the question is how much? Because the money that we're putting here means money that can't go somewhere else. And this is a tighter budget than years past. So how many slots can we absorb next year? How many more slots? Yeah, please. You got an answer?

I can't answer for the entire state, but I can certainly--

Can somebody? Social service, LAO, finance, anybody?

Again, Dr. Lupe Jaime-Mileham, Deputy Director. We can circle back with you number on there only because we do have some fiscal reports from our contractors where I think I've mentioned that they're currently still spending their year one. I do want to clarify that it is not stopping the slots, right. They continue to enroll. It's placing a pause.

So I just want to make sure that we clarify that, because I know there's some worries out in the field about that, and we are committed to continue to--

Right. But the challenge is that you place a pause. It sort of sends the wrong message, because they all have to hire people, which is, right now very hard to hire. They have to be very competitive to hire people. So you hire people. You tell them it's a pause, then what do they do with those people? They lay them off, right? So I think that's what we're dealing with. So we know this is like, where it's going. Right?

So we'd be better to stay here or here or whichever angle it is. But to do this and then just pause makes it much harder to like. It's not like this is a computer. You can turn it off and on. These are people and these are lives on both sides. So I think that's what we're just-- And who are you with?

No, we'll have to wait for public comment. We have a panel right here. For public comment, yes. Thank you.

Sorry, Mr. Chair.

Yeah, I know we have to go in recess to go to our caucus, but they're going to adjourn this item. But I just want to make one comment. As you mentioned last week, Phil, and when you were gone, I did bring up your Taco Bell example on the $30 an hour. And that's part of the issue here, is that if we don't pay adequate wages in the rates, this is all meaningless.

We can fight all we want and talk about better administration and coordination and contract this and that, but it's a house of cards falling apart. That being said, one technical finance question is, I do know that there is a decrease in this general fund allocation, notwithstanding the pause. How does that pencil out? Why do you have less money in general fund for the slots? For the existing amount of slots from the current year to the budget year?

Yes. Due to the one year delay in the slot expansion, we expect that this proposal will reduce expenditures by $134 million general fund.

But how does that equal if there's the same amount of kids? I understand you're saying you don't need a new money for new slots, but if there's the same amount and you have less money, it doesn't quite pencil out. LAO, do you have some comments on that?

I'm not necessarily sure where that number is. When we're looking at what they budgeted for slots, it remains flat year to year. I think there's a question, though, an acknowledgment that it shouldn't be remaining flat. If anything, we should be seeing a reduction in federal funds because we know that there's going to be a ramp down.

Correct.

But we're not seeing that corresponding increase in general funds. So in May, there will be adjustments to not only reflect true up of slot utilization, but then also this issue of, like, when dollars have gone out the door and we'll have a better sense of is general fund going up or it's going down or remaining the same.

Okay. Thank you. And I know we have more questions on this. I would as well. But we're going to take a recess for an hour. We'll be back at about 1:15. And we have one more issue to. This issue is held open. Then we get to issue number five. And then we'll hear from public comments. So that we will recess. Thank you.

Um, like, everything just kind of. But, you know. Yeah.

Hello, this is Peter with LDC. Can you hear me?

Yes, I hear you perfect. Can you hear me?

Yes, I can. Thank you.

Real good. You sound perfect. Thank you.

Thanks, Tom. Yeah, coming in loud and clear here.

Excellent. Real good.

Okay. Thank you. We will reconvene this hearing. We have one more item to hear, and then we'll go to public comment. So the fifth and final item is the California State Preschool program, oversight of the program and some reforms from last year's budget as well as some proposals from the 23 budget. So we have the Department of Finance, LAO, CDE, and the Child Care Consortium of Los Angeles. We'll start with the Department of Finance.

Good afternoon, Chair and Members. Jodi Lieberman with the Department of Finance. I will be giving an overview of some of the key investments for preschool in the 2023-2024 Governor's Budget. The first investment is a continuation of the inclusivity adjustments that were passed in the 2022 Budget Act. The 2022 Budget Act provided increased adjustment factors to students with disabilities.

These increases were paired with requirements for the California State goal providers to incrementally ramp up their enrollment of students with disabilities and have at least 10% of their enrollment be students with disabilities by July 1 of 2024, consistent with the 2022 Budget Act. The Governor's Budget includes 64.5 million Proposition 98 General Fund and 51.8 million General Fund to continue a multiyear plan to ramp up the inclusivity adjustments for the California State Preschool Program.

The 2023-24 year will be the second year of the three year ramp up process, and students with disabilities will be required to make up at least 7.5% of state preschool program providers enrollment. Next, the Governor's Budget includes approximately 63.3 million General Fund and 112,000,000 Proposition 98 General Fund to support an 8.13% statutory cost of living adjustment for the California State Preschool Program.

Next, the Governor's Budget includes a proposal that will allow a child to attend the California State Preschool Program in a free and reduced price meal boundary if that parent is employed in the boundary. The intent is to allow working families and commuters to drop off and pick up their child at a location that is closer to their workplace. The change will be to both full day and part day preschool. This enrollment flexibility aligns with transitional kindergarten.

Next, the Governor's Budget includes a 1.7 million and 3 ongoing positions to support the implementation of the Classroom Assessment Scoring System, or class to be used in all California State preschool classrooms. This funding is split into 763,000 Proposition 98 General Fund and 957,000 nonproposition 98 General Fund to support the preschool class. The class is a tool for observing and assessing the effectiveness of interactions among teachers and students in classrooms.

It measures the level of emotional support, classroom organization, and instructional support provided by teachers aligned with strategies and activities that have been linked through research aligned with, sorry, children's social, developmental and academic achievement, and it is also required as part of the Head Start Monitoring System. This proposal would provide resources and three staff to implement the class for all California State preschool providers and provide support and training to the class for California State preschool providers.

Thank you and I'm happy to take questions at the appropriate time.

Okay, thank you. Next speaker.

Hi, Sarah Cortez, Legislative Analyst Office so my comments are about the 2023-24 proposals. The Legislature could reduce costs by 196,000,000 and maintain the state preschool program as it currently operates. The bulk of these funds come from an overestimate of the COLA and which was discussed by the previous panel. The Governor's COLA estimates reflects the cost of providing the COLA to all providers where a statute only provides the COLA to providers based on the SRR, not the RMR.

Some of these funds are associated with the cost of the recent rate increase being lower than expected. And then there's also 29 million in Proposition 98 due to unawareed slots with regard to the temporary policies. As a reminder, the Governor's Budget does not extend temporary provisions to provide reimbursement flexibility and family fee waivers, and without additional action, these provisions will expire. We recommend allowing reimbursement flexibility to sunset.

We think this would incentivize providers to return to pre pandemic enrollment levels. If a provider can no longer serve its pre pandemic enrollment levels due to either local demand from families or for workforce issues ending the reimbursement flexibility allows the state to either redistribute funds to other state preschool providers that have demand to expand redirect the funding to other priorities or to achieve budget savings.

Also, if funding priorities allow, the Legislature may want to consider eliminating family fees for full day state preschool to have parity with TK and part day state preschool. This action would eliminate the fiscal incentive for families to enroll in a program without a fee and allows families instead to focus on other aspects of a preschool program when choosing to enroll. And that concludes my remarks and I'm happy to take questions at the appropriate time.

Okay, thank you. Next we have CDE.

Good afternoon Chair and Members. Stephen Proffer, the Director of the Early Education Division at the California Department of Education, on behalf of the State Superintendent of Public Instruction. With the expansion of transitional kindergartens, the California State Preschool Program will continue to serve four year old children whose families prefer to enroll them in CSPP. As we refer to the California State Preschool Program along with a growing number of three year old children.

We're very excited about the expansion of CSPP and eligibility changes as that presents the opportunity to increase access to two years of quality preschool for more children, including for children with low incomes, children who are dual language learners, or have a disability. Regarding serving three year old children in CSPP, we are seeing a slightly higher number of three year olds served in the program compared to prior years, likely due to the expansion of TK.

In the fall, CDE held focus groups with contractors where contractors shared some of the barriers that limit enrollment of three year old children. Specifically, contractors shared the following barriers. In statute, four year olds are prioritized higher than three year olds, meaning that as more four year olds enroll in TK, it makes it harder for CSPPs to enroll three year olds.

Programs receive more funding to serve a child who needs additional support, such as children with disabilities and dual language learners for children that are four as compared to children who are three. Finally, school districts have shared that as they pivot to serving more three year olds, community care licensing requirements that are duplicative of existing school rules creates barriers for including children with disabilities in general education settings.

On serving more children with disabilities in CSPP, we appreciate the significant investments the Legislature included in last year's budget and the continued focus on inclusion of children with disabilities in this year's budget. Research demonstrates that inclusive programs benefit all children, not just children with disabilities. In summer, we released some initial guidance on the new requirement around a certain percentage of funded enrollment be set aside for children with disabilities, and we released more comprehensive guidance in February of this year.

As of about a week ago, 20% of contractors, or about 137, are projected to meet or exceed the enrollment requirement of 5% that's in place for this year. However, CSPPs are ramping up enrollment of children with disabilities as they're learning about how to implement this new requirement.

As we look at our data, we see that LEAs are more likely than community based organizations to enroll children with disabilities, which highlights the need for support for community based state preschools to enroll children with disabilities.

Related on the Inclusive Early Education Expansion Program we greatly appreciate the investment of 250,000,000 in last year's budget for IEEEP as these resources provide much needed support as state preschools work to ensure children with disabilities are served in the least restrictive environment, we are working to implement three separate facets of the 250,000,000, including grants to fund directly to LEAs in evaluation of the program and then state level systems building. We anticipate having the RFA for direct grants out this spring, and we're working to finalize decisions around the statewide systems building also this spring.

Just one final note on IEEEP. I'd note that because it's Proposition 98 funded, that community based organizations cannot access IEEEP directly, which we know IEEEP has shown to be so important for inclusion in all settings of state preschool on state preschool expansion. Just sharing a couple of notes here. Of the 130,000,000 that was appropriated in 2122 we were able to award 101,000,000 and went to about 74 LEAs for a total of 6,304 slots.

We'd also note that 24% of the LEAs are new programs, meaning they've never had a CSPP before. We are working to issue an RFA this year to award the balance of the 29 million and anticipate that that will fund an additional 2000 spaces. We'd also add that for context in our deputy Superintendent shared data from our UPK plans on the first issue. I'd add that in that plan we had 286 LEAs express interest in applying to expand for CSPP in the future.

On mixed income, we acknowledged the proposed trailer bill Language that would provide eligibility to state preschool to families who work in the boundary of a qualified free or reduced price meal elementary school to be included for priority in CSPP while still prioritizing families with lower incomes first. Research suggests that all children benefit from universal and mixed income programs, but mixed income programs seem to benefit more children from lower income households.

Finally, regarding the class, we appreciate the administration's proposal to support the Preschool Classroom Assessment Scoring System in addition to replacing a tool that is not only dated but not supported by the author of the tool, meaning there's no training and technical assistance available for it. This investment will align state preschools with Head Start and Quality Counts California, thus reducing administrative burden and improving on measuring quality. And I will conclude my remarks with that.

And I have with me Deputy Superintendent Sarah Neville-Morgan and administrator of Virginia Early to assist in answering questions at the appropriate time.

Okay, thank you. Lastly, we'll hear from Lisa Wilkin with the Childcare Consortium of Los Angeles.

Hi, thank you for inviting me to speak. I represent Child Development Consortium of Los Angeles. We're a center based childcare provider with CCTR, CSPP, and full cost families, some of whom accept, who utilize vouchers through the CAP Program. So in March 2020, we were all hit by a tidal wave called COVID-19 the hold harmless and the COVID stabilization supports were a welcome life preserver. But before we could take a full breath. We were hit by another wave and that was the TK expansion program.

And then as we were trying to come up for error on that, we were hit with a staffing shortage and another wave. And now we're looking at the possibility that the hold harmless and the other supports the family fees are coming back and hold harmless going away, which to me is a riptide. I'm a beach girl. Just so in case you- Needless to say, we could never recover from one thing before we were hit by something else.

And the early childhood community looks very different now than it did three years ago and we are not stable. Going back to funding programs by enrollment, adjusted by attendance, will cause many state preschool programs to struggle or possibly close down altogether. We're looking at closing one of our state preschool classrooms because we can't keep it functioning with just three year olds. It's not possible. It's a challenge because we're struggling to find preschool age children.

Our state preschool program is 25% below the enrollment that we had in January of 2022. Despite significant investments in recruiting and marketing that would translate into a 25% reduction in our operating budget. Without the hold harmless productions, our part day state preschool program is virtually nonexistent, going from 48 to 9 children per day. Reinstatement of family fees will just exacerbate the enrollment challenges. And by the way, I don't think that state preschool has the same federal fee requirement in their funding.

So I think that's something that may be a little bit more doable. Chronic absenteeism is also a big problem at all levels of education. I just read an article in the early times about the chronic absenteeism in our public schools. The younger the children, the attendance seems to be less predictable. And we no longer, as state preschool providers, have the option to terminate services for families who are consistently absent from the program. We're forced to hold spaces open that we are not being reimbursed for.

The other thing I want to talk about is the inequitable application of the cost of living adjustment and the contracts across the state. The way that the COLA is applied. There will be no COLA in the areas where childcare costs the most and significant increases, where the reimbursement rate is higher than the rates in the community. Operating costs for everything continue to escalate for our programs.

And in Los Angeles, the minimum wage will be increased by 5% on July 1, from $16 and four cents to $16 and 78 cents per hour. But because of the inequitable application of the COLA, we will get no increase to pay for our increased labor and operating costs.

We urge you to continue the hold harmless provisions and family fee waivers for state preschool and other early childhood programs until the expansion of TK is fully implemented to give us time to adjust to the movement in four year old enrollment to school districts and parents once again become comfortable putting children back in group care settings. Thank you for giving me the opportunity to speak today.

Okay, thank you. Just maybe, just a reminder on the hold harmless from the pandemic for the enrollment versus the attendance. How much is that again for state preschool that we fund as LAO or finance?

Yeah. So the structure for the direct contract hold harmless is a little bit different than the voucher one. So it's a budget neutral action. There's not additional dollars needed to put in the budget to maintain the hold harmless. The distinction here is it used to, yeah, the funding used to serve a lot more children than it does today. So that's kind of the trade off here.

Yeah. So you don't potentially have more slots which maybe aren't being always fully utilized anyway. So maybe it's kind of my moot point. A few questions. So I guess the big picture for CDE or LAO or finance, one of the goals was when we created universal TK after the blueprint and the Governor's Early Ed Master Plan was the notion that if you fully funded at the public school system with Prop 98 dollars, you could use the dollars you currently spend for those income eligible kids and serving more 3 and 2 year olds.

So I know it's new, it's our first year and we're coming out of the pandemic. So enrollment in all levels of education, including early Ed, are suppressed. Are we seeing that at all materialize?

I could share that. So this is Stephen Propheter from CDE. I could share that we are seeing a slight increase in the enrollment of three year old children. One of the issues, and you've heard it on a number of panels, is workforce, and that kind of goes back to reimbursement rates. So having enough kind of workforce in place to work with a younger population. The majority of children in state preschool have traditionally been four year old children because we've got that prioritization for fours.

Yeah. But in addition to the reimbursement rate, we did do a few things the past few years. We increased the factor, the toddler factor and for threes as well. So I guess one of the things that I think we pride ourselves on is listening. The last couple of years, a lot of the providers, whether they're state preschool or private pay, who weren't authorizing state preschool, they're like, hey, four year olds make so much to us. They mean so much to us and our financial viability.

And so without that piece in there, we're in deep trouble. And our response was, well, hey, why don't you serve more three year olds in zero through three? And they'd come back and they'd say, great idea, but it costs way more money than we have. So our response was, what do you need? And they said, x, y and z. And our understanding is we did pretty good the last couple of years at writing exactly what was requested for that. So that's pretty much in plain English.

But all that being said, what has happened since we authorized that? Is that working?

I think it's still a little early. I think we think that the increase to that adjustment factor, which is 1.8 times the amount of the reimbursement rate, is a big help. One of the things that happens is as you ramp up any kind of policy change when our state preschools are enrolling children, they were doing it before the budget was enacted. So I think then we see kind of that increase in threes happening a little bit later than, say, after July 1.

One of the other issues is that threes are not prioritized even at the same level as fours. So a state preschool program has to essentially go through all of their eligible four year old children before they can enroll three year old children. So I think that eligibility piece is possibly a pretty big barrier.

So that's just time or that's something we need to adjust there.

It's something that would need to be adjusted so that the eligibility for a three year old child and a four year old child were the same. I'm sorry, priority. I'm saying the wrong word. Not eligibility, but priority order.

Because right now we're saying go for all fours. And even though some of those fours may be going to TK.

Right.

So we're missing the chance to do. So what needs to be done to address that?

In statute where we have the priority order for enrollment, four year old children would be prioritized the same as three year old children. Right now, four year old children are prioritized above three.

Okay, good idea. And we have a follow up TK bill, so maybe we could add that clause in there. So on that note, what else do we need to do to make this all work? And I know we hear some stuff in public comment, and there's a lot of other issues, including the adult issues and just the people problem.

But what pieces do we need to put in place to follow up to the commitment, the promise that, hey, we hear you, we're not going to let these programs flounder. We're going to try to help you serve more zero through three. What other elements do we need to be looking at?

I think from CDE's perspective, at the risk of repeating it's reimbursement rates, increasing reimbursement rates, I think for all of CSPP, I think the threes, the adjustment factor gets at a lot of what you said, but if you increase the rate on which that factor is applied.

And then also too, when we implemented TK, there was a proposal from, I think, finance that says that if you were in the cohort as a four year old and you were eligible for California State Preschool Program, your option now is tk. And we changed that and we made it so that no, you could still choose to go to state preschool if you're income eligible. And we increased the eligibility.

So now more lower income and even working poor families and middle class families who are in the state preschool eligibility can make the choice and stay and go to their state preschool if they choose. How's that playing out?

So I think that we'll see more with our data, but children, they're still enrolling in the state preschool program. If I can come back to the, before I come back, one of the consistent messages that we've had is that family choice is still preserved with state preschool. And that was one of the policy changes that was made, I believe, in either last year's or the year before budget.

When TK age eligibility was expanded, the Legislature ensured that state preschools at four year olds could be enrolled in a state preschool as well. Going back to the three year olds, there's a couple of things that could be done around the license exempt component in school districts.

So as we see school districts where more four year old children could be moving to a TK program in those same settings, extending the license exempt age to three year old children and kind of eliminating some of those duplicative licensing requirements is one thing that could be done to support enrollment of three year old children.

Also, stacking adjustment factors, because right now in our state preschool program, a family is eligible essentially for, or a child is eligible, generates only kind of just additional reimbursement based on the greatest adjustment factor that the child qualifies for. So to give an example, a child with a disability who is also a dual language learner, that child needs additional supports. But the state preschool rules only allow the contractor to report the child under one adjustment factor.

So where we've got kind of complex needs, we're able to address with one adjustment factor that helps.

And then, Lisa, from your perspective and maybe can rephrase the question, we try to make this commitment that we didn't want to leave providers behind, whether state preschool contractors or family childcare homes who could use somebody with their state preschool voucher. And the idea was, hey, serve more zero to three and we increase the rates, including the factor, and then change the eligibility so more state preschool families could stay if they wanted to and choose that over TK.

So how's that playing out and what potentially needs to be addressed in your perspective for us to consider?

I think I said in my remarks that we're down 25%. We've tried really hard to find children. Some of them are going to, I'm in the LA unified attendance area, so they are the largest school district in the state, I believe, with a very large early childhood program as well. We're all competing with each other for the same children. The adjustment factor, changing the adjustment factor for three year olds helped with state preschool in terms of earning our contract, but it doesn't give you more children.

It just gives you more money. If we don't have the children, we can't apply the adjustment factor to anything.

Got you. I know we have slight flattening of population in California. It's happening anyway. And if you look at this table that the LAO put out, that the number of kids in 2029 in state preschool was about 140,000, then 2020 dropped, of course, in a pandemic to just under 80 and 2021 it's roughly 90. And then it looks like 2022 preliminary is under 100. So we're not back to where we were, 2019. So it may not necessarily because of this change.

It may be because of two things happening.

I think there's many things that many things happening.

This just maybe conflates or compounds the issue.

Yeah. Because we also have parents who are nervous about putting their children back in group care situations, and particularly those if the parents don't need childcare to go to work. The part day programs tend to be a lot more, I think, diminished than the full day programs do.

Basically. Are there any things that we should be looking at from a state perspective?

Yeah, I think that we need to probably do a better job as a state, and I'm not sure that it's the Legislature's role, but really encouraging parents of three year olds to enroll their children in preschool. I think that not only were they a lower priority, but fewer parents were actually looking to put their children in preschool when they're three. So really getting those parents to understand that it's important, but there's a lot of things I'm probably going to take too long to go through everything.

What about that idea last year that I think finance rolled out there, Cde two that allowing two and a half. Two year olds, two and a half year olds. First state preschool.

That is an option, but there's a pool of children that we have in the state so you're shifting children out of CCTR and shifting them into CSPP. That's fine. We would do it. We would serve two and a half year olds, but it's also staffing for two and a half year olds. It's more like toddlers. And so there's diaper changing going on. There's difference of ratios and we have a really hard time finding.

We're having a hard time finding staff, but we're also having a hard time finding staff who want to work with the younger children, they really want to work with the older children where they don't have those other care issues.

I'm just hearing you about the number of kids issue and that I would think there's, first of all, state preschool you could say it's a little more stable with our funding source than childcare overall, unfortunately. And sometimes there's more eligibility for a state preschool than there is for childcare. So this opens up a cohort of young people that you wouldn't have otherwise.

Yeah, like I said, I'm fine with that. I'm just saying that that's going to shift kids out of CCTR. It's just moving the deck chairs a little bit, but yeah, it's just where the funding source.

But aren't there kids that would be eligible for state preschool that aren't eligible for CCTR?

Yeah, sure. If their parents just want them to come for 3 hours and they're two and a half years old, that's fine. But for full day, anything, you have to have a need. So then it doesn't matter CCTR or CSPP, you have the same need requirements.

Okay, a few more questions. So we have this expansion for the set aside for state preschool for special needs kids based upon the demand. Is that worthy to continue or should we delay that like we're delaying other things in the budget?

Just based on the initial data that we have this year, there's 20% of contractors that are slated to hit 20 or, I'm sorry, 20% of contractors are slated to hit the 5% set aside. We do have a few years to implement and we think that some of the investments around the increase in the adjustment factor for serving children with disabilities, it's 2.4 times the state preschool rate. The rollout of the inclusive early education expansion program will help in many cases. I think it will help.

And also I'd also share that the CDE is required to put into place a waiver process in a few years where considering kind of contract status will be part of that. But that waiver process we see as a way for us to, in addition to what we're doing now and kind of understanding barriers, I guess.

In short, we wouldn't recommend a pause, but we would recommend continuing it and knowing that there are investments in place to support capacity, but think that an appropriation that supported community based organizations directly through an expansion of the Inclusive Early Ed Expansion Program would help.

Yeah.

Could I say something? So there's a capacity issue for assessment. Only school districts can do the assessment for an IEP, and the school districts have a limited capacity and they're also only doing assessments until kind of mid spring, and then they have to stop for the school year because they don't have time to get everybody assessed. And so that's one of the issues that we're finding is a problem, although we are hitting our 5% this year.

The other thing is that the definition of a child with special needs is only a child who has an IEP or an IFSP. But it does not include children who have medical issues that are special needs but do not require, they don't affect their education plan. And so an expansion of the definition of who's considered special needs might help with increasing the number of children who are getting services under this program.

Okay. And then lastly, regarding the California State preschool providers, as we saw in that chart a second ago, few kids are just participating as a whole, and some programs after the pandemic and workforce shut their doors. And of course, some of those providers are saying they may be losing their kids to TK. Is there anything in law that prevents them or hurdles that prevents them from serving private pay families?

Yes.

What is that?

State CSPP and CCTR contractors, if you're serving private pay families, you have to charge the parents the same amount. If you have children served in the same classroom, parents have to pay the same amount as we get reimbursed from the state. And parents are actually, the higher that the reimbursement rate is from the state, the fewer parents there are in the community who can afford to pay those rates to allow their children to participate in that program.

But they're probably paying equal or more at the private place next door that may not be existence. I guess if you're in a community where there's not enough space, for whatever reason, the private pay and parents are paying, as we know, in LA or here in Sacramento, two grand or plus more a month. And like I always say, that's more than it costs to send your kid to UC Berkeley, UCLA in tuition, not housing, but just tuition.

And maybe they go to the state preschool and the reimbursement rate may be high, but it may be less than what they are paying at the other private facility around the corner.

Might be, but also it might be more than they're paying at the other facility. So it just kind of depends on the neighborhood that you're in. We have a lot of families who are right there on the edge of where they would qualify, but they're talking.

About families that don't qualify at all. They're truly private pay and they don't have, and maybe they're running out of options. And so what could we do if we're like, hey, this state preschool over here has an open door, and so what are we doing to make sure that if we can just allocate need.

We do that already. And in my program we do, we serve both private families and full cost families in the same facility.

What's the cost for private pay versus what's the reimbursement for same kid, full day?

Well. It's about the same. We're just open to anybody. But some programs may not want to have to deal with both. Tuition paying parents are a different kind, a different population of people, different kind of issues that they have. So some programs prefer to just have private pay parents because that's what they're comfortable with. Some programs just like to have subsidized because it's what they're comfortable with. We've always done both.

And to us, it's a win win for us because we have a very wide, it's just like going into then into public school, right, where it doesn't matter what your income is, everybody gets the same. I'm totally good with that.

We can add that this is an area where we're looking at issuing guidance. I think a lot of what Lisa mentions is the blending and braiding and how blending and braiding funding. And that is an area that I think some of our state preschools who may be newer, maybe administrators who may be newer to the program, maybe don't have a state preschool and a Head Start.

We've got some capacity to build in kind of in doing that, blending and braiding and bringing in private pay families, it's something the programs can do now. Those families are referred to as non certified, non subsidized. They essentially pay the full cost of whatever rate. There are things that we could look at with a sliding fee scale, but that kind of goes beyond what the current family fee scale is for subsidized families.

Okay. And then can we focus again on the issue that I brought up earlier about TK implementation and after school, universal after school and extended learning and wrapping the two to make sure that you serve families. Like you said, that part a will not work for a lot of families. I get that some families may make that choice, but for many they need longer than even a full school day.

What is happening with CDE and providing guidance as far as how California State preschool programs can be used to help wrap TK-K Expanded Learning ELO-P.

So we have guidance on what we refer to as extended learning and care for the California State Preschool Program which allows children that are enrolled in transitional kindergarten and kindergarten to receive, to be funded through CSPP to extend the day. It is currently limited to part day state preschool. So that means that it's up to 4 hours. So if you think about how the type of access that, that provides for families, if you have a TK day, that's 180 instructional minutes.

So roughly 3 hours or so, give or take some maybe recess and what have you, and then you add up to that 4 hours, you're really getting between six and a half and seven hours max. And so that kind of part day model doesn't provide the full access to a full day for working families, the other thing we'd share is that the prioritization for statute currently prioritizes TK and kindergarten children in extended learning and care as kind of the last priority.

Okay, thank you.

Okay. Thank you. I appreciate this. We will hold these issues open and come back a couple of months down the road. Thank you. With that, we will proceed now with public comment.

Thank you. If you could line up in the middle right there and you could begin. And please keep your comments to one minute or less, 60 seconds or less. Thank you. Please proceed.

Okay. My name is Rachel Church and my life story outlining severe childhood traumas was published in San Francisco's Mission District streets in 2019. I'm grateful to be alive to speak for my mission district community who relies on subsidized childcare. I'm a Parent Voices leader. When my child was born, we were homeless together in a cold motor home in San Francisco's Mission District. To help my infant survived, we moved to a 12 square foot SRO costing $1,750 a month.

My worker at children's council in 2017 said that my family fee would be $200. In paying the family fee and my rent, I had nothing left over for food, transportation or clothing. We need to have a backup plan when the state discontinues funding family fees waiver on July 1, 2023. We are asking you, my hardworking assemblymen and women who I admire, to please extend the family fee waiver.

Thank you. Excellent job.

Good afternoon. My name is Elia Fernandez and I'm with Parent Voices and I was on the waiting list for a long time with no childcare but unfortunately was never called. I was self employed so I can take care of my children. We had to live with my parents to make ends meet.

At this moment, I am a grandmother of six grandkids and one of my grandchild is autistic and one day when we were not looking, he opened the door and ran out into the street and was hit by a car.

And I wish to threw him across to the other side the car. And now it's difficult for our family to find child care because nobody was trained to take care of kids with autism or special needs. And with this condition, we need to expand child care slots to serve all children and increase pay for child care providers based on actual cost of care, especially those who take care of the special needs children providing child care for parents on the waiting list. Please do not suspend slots.

Thank you for allowing me to speak.

Thank you.

Hola, mi nombre es Jacqueline Reyes soy miembro de par en voices, soy madre de dos niños, el cuidado del niño debería de ser accesible para todos y deberían estar incluido en el presupuesto del Estado de California Nico pago está suspendido por ahora y por eso que apoyó que el subsidio continúe en el presupuesto de este año en el que están tratando de suspender los pagos de familia. Gracias por su apoyo.

Thank you.

I'm going to translate. Hello, my name is Jacqueline Reyes. I'm a member of Parent Voices. I'm a mother of two children. Child care should be affordable for everybody and be included in the budget of the State of California. I have a co-pay that for now is suspended and I support the subsidy continues in this budget year. The family fees. I hope you keep waiving the family fees.

Thank you.

My name is Lourdes Alarcon. I'm a member of Parent Voices for 15 years. I've been advocated for childcare. I'm a single mother of two children. I was able to obtain a degree and pursue higher education, but now I'm trying to empower my community to keep that education open and affordable for other families. And I'm also a childcare provider. I teach Spanish in a preschool and two of our families have to leave because now they can afford the family fees. Thank you.

Good afternoon. My name is Maria Luz Torre. I'm the organizer of Parent Voices San Francisco. I am going to read this testimony of a parent who was supposed to be here, but her daughter got sick this morning. So my name is Taima Fasi from San Francisco. Childcare has always been my greatest concern. Being on the waiting list for so long, it has cost me nearly two years of college. I was not able to work and get a full time job.

When I was finally called, my children had the opportunity to join one of the family childcare homes. I was able to work and go to school, and I felt better. I increased my income and my family thrived. However, on many occasions, the childcare providers discussed with me that the reimbursement rate for my two children did not cover the full cost of care and was far from being fair. I also learned that when my kids are out sick, that she does not get paid.

I was speechless because I honestly do not know what to say or how to make the situation better. I'm representing families waiting for childcare assistance with my fellow parent voice leaders, and I'm speaking for all the children who have no voice. I speak for the families that are so busy trying to make a living and care for their children. It is very important for me to represent them because I was there once and I know how it feels.

For these reasons and many more, I'd like to thank you for making childcare a priority to keep your promise to increase childcare access and build childcare infrastructure. We do not have enough capacity to serve children because many licensed care closed their doors during the pandemic. We should increase the rate of reimbursement and compensation to providers to match the market rate and to cover the actual cost of care. We want accountability for money that was allocated and do not suspend slots. Funding delayed is care denied our children. Thank you.

Thank you.

Good afternoon, Chair. My name is Raquel Yoffie and I'm representing the California Alternative Payment Program Association, or CAPPA. Thank you for having this hearing to support a richer understanding of the challenges of an antiquated reimbursement structure and acknowledge the need to honor the commitment to add new slots and know even more are needed. In regards to the COLAs, our agencies cannot use the COLA to help support the enrollment of families or getting them connected to childcare. They can only be used to purchase new slots.

And as we heard earlier from panelists on issue four, capacity grants are only a temporary fix. On this point, we ask that any COLA in the budget be allowed for use by our agencies to directly support families and enroll more slots. Finally, we are asking for the funding of our agencies to be increased from 17.5% to 22%, of which roughly 13% directly supports families, so that we are able to fund all the work needed to directly support families and get children secured in stable childcare.

In closing, we would like to align ourselves with the priorities of the ECE Coalition. Thank you.

Thank you.

Good afternoon, Mr. Chair. My name is Grace Dikho. Here on behalf of the California Alternative Payment Program Association, or CAPPA. First and foremost, I would like to echo our panelists and underscore that we need as many childcare enrollment slots as the state will fund. As you've heard, our community partners have nearly tripled in their capacity. But prior to the pandemic, they were supporting almost 58,000 voucher childcare slots, and today that number is roughly 162,000.

To put this into perspective, the ratio of case managers to families was about one to 50. But we are now hearing that some agencies are experiencing a ratio of one to 200 or plus families. Although agencies have tripled in capacity, they did not receive any new funding to build up their size. The bottom line is that agencies are having to do more work with less reimbursement.

We ask that there be consideration of increasing the funding for agencies to cover all the work needed to lift up and support families to self sufficiency. We would also like to align ourselves with the priorities of the ECE coalition. Thank you.

Thank you.

Good afternoon. My name is Andrew Avila, on behalf of Early Edge California. Thank you, Chair McCarty and Committee Members for hosting today's meeting. Early Edge thanks Governor for his continued investments to support the expansion of TK. We want to mention that to support educators and school districts impacted by the pandemic and the need for more TK teachers in the classroom-- and the need for more TK teachers due to expansion, sorry.

We ask that the deadline for the lead teacher in the TK classroom be extended by at least a year. Early Edge also supports the quality conversation on requirements proposed for the second adult in a TK classroom, but would like to see more embedded supports to help aides and paraprofessionals achieve professional development as well as validation of previous experiences in early learning settings.

Lastly, Early Edge is a proud member of the ECE Coalition and uplifts the coalition's request to increase reimbursement rates and adopt an alternative payment model that covers the full cost of care, including waiving family fees. We thank the Committee for its focus on these important issues. Thank you.

Josefina Ramirez Notsinneh with Children Now. Want to align ourselves with the Early Care and Education ECE Coalition? The specific ask is providing a 25% increase to current rates for an immediate relief and adopt an alternative methodology using a cost estimation model and include a timeline for implementation for the actual cost of care based on program enrollment without charging families fees.

We know that the Legislature and the Administration are committed to expanding opportunities, and we hope that we can get a down payment this year and be on the road towards rate reform.

Thank you.

Good afternoon, Mr. Chair. Rosanna Carvacho Elliott here on behalf of the Early Care and Education Consortium, which is the National Association of Child Care Providers here in California. They run about 468, close to 470 centers and have the capacity to serve 66,000 children. I want to thank you for all the very thoughtful questions on the impacts of TK.

I think we heard from numerous panelists today. A little bit of what's going on out in the field for childcare providers as they're dealing with the loss of four year olds. You yourself, Mr. Chair, talked about how you understand the business models of how all of these providers work and ECEC providers are both subsidy as well as private pay. One of the questions you also asked was around state preschool and how do we kind of blend those models with private pay families?

And out of the 470 almost centers, only one of them has a state preschool contract. Right. So I think there's a lot of work that we can do here together. Again, appreciate the thoughtful questions from you, Mr. Chair, and how much time you're spending being the only one still here. And just would like to say that unfortunately, given what we are seeing with the impact of TK on our care programs and the ability to continue to stay open.

Excuse me, we unfortunately have to oppose the governor's expansion of the early TK students with summer birthdays and in closing, want to align ourselves with the ECE coalition's rate ask. And thank you again for your time.

Access to childcare is absolutely crucial to maintaining and supporting the re-entrance into the workforce for so many, and to also ensure diversity and equity into the job sector for working parents. The state building trades represents nearly 500,000 working men, women and non binary individuals. 65,000 of those are enrolled in our state of the art apprenticeship programs and unfortunately, only three and a half percent of those enrolled in the apprenticeship programs are women.

As we work to continue to increase this number, one major obstacle to recruiting and retaining women in the construction industry is the lack of accessible, quality childcare and as well as the high cost associated with full time care. Fortunately, through the leadership of Assemblymember Ting and Senator Skinner and previous budget cycles, the Women in Construction unit was created at the DIR to address this disparity.

That work has begun in earnest this year with the release of the ERiCA grant, the Equal Representation in California Apprenticeship program, and the care stipends that will provide for women and parents enrolled in state approved apprenticeship programs and pre apprenticeship programs. Working families are in dire need of access to quality care and we respectfully ask that you reject the proposed pause and increase slots. Thank you.

Thank you.

Good afternoon, my name is Khulood Jamil. I'm here with California Family Child Care Association and with the ECE Coalition. I've been doing been a family childcare provider for 27 plus years in Contra Costa County. I've been part of the QIRS, DRPD. I have my accreditation nationwide, been a board member with our RNR and then the Committee College Diablo Valley College, also our local Contra Costa Association. I'm here to ask you please include family childcare provider in the UPK because this program are destroying us completely.

If you take the children age three and above, then we will left with only infant. With the licensing, we cannot have more than four infants. So changing my major, going back to school, taking all the courses, all the training that I did with the QIRS, with the DRDP, everything. Name them. I've been part of it. And there is a lot of providers like us. So if you don't include us with this, what's that mean?

All these years and all the budget that you put in these programs are nothing down the drain. And you are not qualified to take care of the children 3 and 4 years old, to get them ready for kindergarten. So I'm requesting that you include us, the family childcare providers, in the UPK program. Thank you for your time.

Thank you.

Good afternoon. My name is Benu Charbra. I'm a large licensed family childcare provider in Contra Costa County for 23 years and been in the field over 32 years. I'm here to represent California Family Child Care Network and ECE Coalition. As we all know, 95% of the brain development happens before the age five. And who's taking care of those children? We are. In our family child care homes, we have babies from six weeks old and they stay with us for the first five years of their life.

And also some of us take care of the school age children as well. And we were the only people who were open during the pandemic. We made essential workers get to work. And we are the workforce behind the workforce. And I'm requesting you, please, to consider us family childcare providers.

I heard earlier, and we all know that providers leave this field, or even the employees, they don't want to work for us because they can go to Starbucks or Pete's coffee and I heard before, Taco Bell to make over $20 an hour. Now, many of us, including me, we hold degrees. And I'm also a California early childhood mentor teacher. When I have students coming to me from the lab schools, what I'm telling them that I don't even make minimum wages.

And this is what you're going to get after you graduate. But we as a family childcare providers, after working 12 to 14 hours a day, and many of us work more than 20 plus hours. And we're still keep educating ourselves because we want to serve our communities better and we want to provide the quality childcare. I thank you for your time.

Thank you.

Good afternoon, Chair. My name is Jeanette Cooper. I am also a childcare provider for 21 years. And I'm here to represent. I am a member also of ECE Coalition and California Family Child Care Network. I'm sorry I'm so nervous. So I'm here to ask you to please waive the family fee for my subsidy families because the majority I serve is like, half of them are from subsidy. And also, I'm helping a family who is in the foster--

They're taking foster babies, so I am helping them, too. So that's all I'm going to say. Thank you.

Hello. My name is Nancy Wyatt, and I'm the Public Policy Chairperson for California Family Child Care Network. We're proud members of the ECE coalition, and I want to thank you for understanding. You get it. The family fees are draconian, and I'm so pleased to hear that you realize that. And when you talked about it wasn't fair that schools were getting increases, but the childcare community was not.

You're getting that. It's like we haven't had an increase for years and years and years and years. 25% increase ask sounds like a lot, but we haven't been increased for years and years. It's not. We're going under. We are in crisis. I was on the phone last night with providers throughout the State of California, hundreds of them. I promised them I would get up at 2:00 in the morning and come here and tell you we're in trouble. The state is in trouble. We're in crisis.

You've got to do something about those rates and the way they're calculated. Okay. And choice, you appreciated choice. You wanted the parents to be able to choose. Can they go to TK? Can they go to CSPP? Okay. We have fantastic family childcare providers in this state, and resources. Don't ignore those resources. Find a way to include us in the universal preschool system. Find a way to appreciate the ones of us who are quality and dedicated. You can't just toss us aside. And I guess that's it. Thank you very much.

Thank you.

Good afternoon, Mr. Chair. Zong Lore with the California School Employees Association. Our comments today is focused on the governor's proposal that requires the second adult or paraeducator in the TK classroom to meet additional requirement. We continue to ask, what problem is this proposal trying to solve? We heard earlier our school districts are working really hard to expand TK.

This new additional requirement will only deter our paraeducators from accepting a position in a TK classroom because in a few years, they will no longer be qualified to do the same job that they have been doing. So we should not be making it harder for them to do their job nor create unnecessary barriers for workers in the middle of an educator workforce crisis. We ask that when the time comes that you please reject this proposal. Thank you.

Thank you.

Good afternoon. My name is Esmeralda Martin-Singh, and I am here with the Low Income Investment Fund and Build Up California. As a former educator who recently left the classroom in June 2022, there were so many factors that forced me to leave the profession. A lack of fair wages that made me feel undervalued and overworked was a huge reason why I decided to move on.

We need to invest in ECE provider rates and show them that their work is valuable and that they matter so that this doesn't continue to happen. Your support of the critical childcare priorities will solidify you as all as the champions for early care and education that we know you to be. At LIIF and Build Up California, we thank you for considering the ECE coalition's request, and we hope that you support it as moving forward. Thank you.

Thank you.

Good afternoon, Mr. Chair. Childcare funding decisions affect all of us, from those who depend on it to providers who nurture the next generation and the children who rely on the care to learn and grow. My name is Karina Laigo, and I'm with Child Care Law Center. We opposed a proposal to eliminate Title 22 protections for LEA-based preschools for three year olds. Title 5, unlike Title 22, doesn't guarantee comparable strong transparency rights for parents and health and safety standards.

For example, no guarantees for toilet or diaper assistance for three year olds, no annual unannounced inspections for all programs, just to name a few. We additionally align our priorities with the ECE coalition. We want to thank the Legislature for their previous investments during the pandemic. Childcare is a public good. Our leaders can honor that by paying providers fair rates. Thank you.

Thank you.

Good afternoon, Chairman McCarty. Thank you for facilitating this important discussion. My name is Laurie Furstenfeld, and I'm Director of Legal Advocacy at the Child Care Law Center. And we also are proud members of the ECE coalition and align our comments with theirs. I also speak on behalf of Equal Rights Advocates. We can set up a more equitable childcare system in California that embraces childcare as a public good.

California can fully fund affordable childcare for all families by funding increased access to the current community based settings where parents can choose no cost care for their 3 and 4 year olds in the setting that meets their children's developmental needs and the parents needs. We can increase subsidy payments based on the true cost of care and an equitable fee schedule so childcare providers are paid fairly, can care for their own families, and parents can actually afford subsidized childcare. Thank you.

Thank you.

Good afternoon, Chair McCarty. My name is Juliet Terry. I am with Child Care Resource Center, or CCRC. We're one of the largest family and child services nonprofits in the state, and we are a proud member of the ECE Coalition and stand in full alignment with their budgetary asks, which my colleague Dr. LaWanda Wesley, so kindly detailed earlier today in her panel discussion today. We have heard repetitively the dire need for the state to take action on the issue of rate reform.

The fact that so many providers earn so little from essential care, from providing the essential care and education that our children need, is shameful. The fact that they earn so little from this essential care, that they have to rely on other public subsidies, is shameful. ECE workers deserve a living wage for the critical foundational care that they provide for our families and our economy.

Many, many families have come here today to voice their truths and detail the devastating impacts that the reinstatement of family fees would have on their lives. And it is critical that family fees remain suspended while the state takes action to adjust the fee schedule to one of those more equitable and builds on California's economic justice efforts.

CCRC would like to take a moment to thank Assemblymember Majority Leader Gómez Reyes for authoring AB 596, which addresses these issues of childcare rate reform and family fees head on. CCRC is a proud sponsor of AB 596, which would create new reimbursement rate structure for ECE providers to get the full cost of care covered, reimburse based on enrollment, not attendance, and shift the family fee schedule to a more equitable one that puts money back in the hands of families.

Thank you to the Committee for having this very pressing and important hearing today on these issues. And a special thank you to Assemblymember Reyes for being a true champion of children and families in California. Thank you.

Good afternoon. Kaya Shenzewe with the California Child Care Resource and Referral Network. I'm reflecting that just three years ago now, we were a week into the quarantine, having no idea what was in front of us. But what I do know is that our state quickly pivoted to really save childcare by suspending family fees, by paying providers based on enrollment instead of attendance. Then, as federal funding came in, we saw stipends. We saw so many supports that honestly kept our childcare system from collapse.

But we are now literally on the edge of collapse with none of these things proposed to continue. Another thing that helped us not collapse is through the CCPU agreement, $25 million over two years was provided to the California Child Care Initiative Project, which Ms. Magnusdottir mentioned on an earlier panel. The two years prior to the pandemic 2018-19 and 19-20, CCIP received $5 million increase to their funding and increased the number of spaces in licensed family childcare homes by 30%.

In the CCPU agreement, they received $25 million over the last two years. In the first year, which like many other contracts, only started in January of last year. So in the first year, which was only six months, CCIP was able to start 945 new licensed family childcare homes as well as compared to the time period in the previous fiscal year, saw an 89% increase in participants opting to re-open after they had closed.

So we really think all of these things are needed to continue to make sure we don't fall off the childcare cliff. So CCIP needs to continue having funding in the amount of $12.5 million a year from the increased CCDBG funding. Thank you.

Thank you.

Good afternoon. Heidi Keiser, Public Policy Officer for Child Action with a local alternative payment program and Resource and Referral for Sacramento county. I'd like to support both the ECE recommendations and the CCIP request from the resource and referral network. Thank you, Chair McCarthy-- Sorry, thank you Chair McCarty, for this great opportunity and your thorough consideration of early care and education.

Hi, my name is Merfat Gamal. I'm a member of Bay Area Professional Family Child Care. So I would request for you to please increase rates, waive family fees as a child care is second largest bill on parents and we need to make livable wages. Thank you.

Thank you. Okay, that's it. Thank you. We'll proceed now to the public comment on the phone. So please begin, Operator.

Thank you. Ladies and gentlemen on the phone lines, if you wish to make public comment, please press one followed by the zero. One followed by the zero. We'll begin today with line 41. 41, you are open.

Buenas tardes, mi nombre es Jasmine Matan. Soy una madre líder de Parent Voices. Vivo con mi familia está conformada por mi esposo y mi hija de 2 años, mi problemática ha sido que no tenía la oportunidad vincular a mi niña cuidado de niños desde los 8 meses. He estado aplicando webs de bancos ingresos o gratuitas en diferentes organizaciones de la ciudad, pero me dicen que no hay disponibilidad o me incluyen a una lista de espera que hasta luego hasta la actualidad no es mi voz ninguna respuesta con un nivel de reembolso que dejan a los proveedores en pobreza. No es ninguna sorpresa que es difícil para mamás, como yo conseguir un cuidado de niños en el caso. Que sí se pudiera conseguir el estado me cobraría una cuota familiar de 260 al mes por esto para mí es demasiado caro para mi familia. Probablemente me quedaría en casa con mi niña, en vez de pagar una cuota mensualta en alta, por eso estoy aquí para exigir usted tomen acción que suspendan las gotas familiar hasta que desarrollen un sistema más justo y para subir el reembolso a los proveedores, un 25% para mostrar valor que hacen su trabajo. Gracias.

And we'll go to line 13. You are open.

Good afternoon. Carlos Rojas with the Kern County Superintendent of the School's Office representing the 46 school districts and 200,000 students in Kern County, of which 70% qualify as low income. Want to express our thanks to the Committee for your ongoing investments in universal Pre-K programs, including TK. These programs have greatly benefited families, especially those in poverty, and we respectfully request the Legislature reinstate the proposed $550 million delay to the preschool, TK and Full-Day Kindergarten Facilities Grant.

There are currently just over 4000 students enrolled in TK in Kern County and about a quarter of them are being served in classrooms that do not meet state requirements. TK enrollment is projected to grow significantly by 25-26. Delaying these funds will only result in districts having to displace students and serve many students in classrooms that do not meet state requirements.

Some districts have already reduced full-day TK programs to half-day TK programs due to a lack of facilities, and this delay in funding would just exacerbate the problem. Thank you for your time and consideration.

And next we will go to line 12. Please go ahead.

Hi, my name is James Moses, representing the California Association for the Education of Young Children. Just want to support and uplift the ask of the ECE Coalition, especially around increasing the reimbursement rates for our childcare providers asking for a 25% increase. Additionally, we'd like to see those allocation of those 20,000 spaces that the Governor is looking to postpone to have that reinstated and released in the 23-24 budget. Thank you. Thank.

Thank you. Our next participant is, one moment, please, line number 11, you are open.