Monday, January 17, 2011

Recently Elected Governor Jerry Brown Unveils New Budget Proposal for 2011-2012

On January 10, 2011, Governor Jerry Brown unveiled his 2011 - 2012 budget proposal addressing a $25.4 billion projected shortfall for the remainder of the 2010-11 and the upcoming 2011-12 fiscal years. The Governor’s budget includes many significant ongoing program reductions, posing very difficult decisions for the Legislature. His proposals touch nearly every area of the state budget—often (as in Medi-Cal) with proposed reductions similar to ones suggested by the prior Governor and rejected by the Legislature. While the Governor’s revenue proposals result in a $2 billion increase in the Proposition 98 minimum funding guarantee for schools above its current-law level, his budget would result in a small programmatic funding decline for K-12 and more significant reductions for community colleges and child care programs.

Here are the cuts as it pertains to Child Care, for detailed information on the budget please visit

Child Care and Development Program (Proposition 98)

General Fund Solutions

Decreases direct child care services, except Preschool, by $716 million in 2011-12 through the following actions:

• Eliminates services for 11-and 12-year olds. Reduces by $34 million CalWORKs Stage 1 (administered by Department of Social Services, savings reflected in that section) related to the elimination of this program.

• Reduces eligibility to 60 percent of the State Median Income from 75 percent of the State Median Income.

• Reduces the level of subsidies across the board.

• Provides greater flexibility at the local level to administer the remaining child care funding in order to implement the across-the-board reductions. In this regard, subsidized families would pay the difference between the subsidy and regular day care provider charges as a co-payment directly to the provider in lieu of the state’s administrative agents (Alternative Payment agencies and Title 5 contractors) assessing and collecting current family fees.

General Fund Policy Adjustments

• Sets aside $52.6 million in 2010-11 from one-time Proposition 98 settle-up funding to continue services for Stage 3 families effective April 2011, at a service level consistent with the policy solutions proposed for 2011-12. These policy solutions affect age and income eligibility and reduce subsidy levels across the board for all direct service child care programs.

• Decreases by $34.2 million in 2011-12 to reflect lower Stage 2 caseload projections to conform with the 48-month time limit that replaces long-term reforms as discussed in the Health and Human Services section.

General Fund Adjustments
• Increases CalWORKs Stage 2 by $241.5 million in 2011-12 to reflect a $4.2 million caseload increase and restoration of one-time funds used to support services in 2010-11 ($201 million of Proposition 98 one-time savings and $36.3 million American Recovery and Reinvestment Act (ARRA). Total base workload costs for Stage 2 is $435.2 million.

• Increases CalWORKs Stage 3 by $256.2 million in 2011-12 that reflects a caseload reduction of $42.4 million, restoration of one-time funds used in 2010-11 totaling $42.4 million ($23.7 million of prior year federal funds and $18.9 million ARRA), and restoration of the $256 million partial-year veto. Total base workload cost for Stage 3 is $342.4 million.

• Increases by $83.1 million in 2011-12 to restore General Child Care, State Preschool, Migrant Child Care, and Allowance for Handicapped programs that were required to utilize excess contract reserves to meet costs in 2010-11.

Non-General Fund Adjustments
• Decreases the Child Care and Development Funds (CCDF) by $18.5 million in 2011-12 to reflect removal of one-time carryover funds available in 2010-11 ($24.4 million), an increase of $3.2 million in carryover funds reserved for expenditures that promote quality improvement, and $2.7 million in available base grant funds.

• Decreases the ARRA funds by $110.1 million in 2011-12 to reflect the one-time nature of the fund source used for child care program for two years.

• Increases by $58 million in 2010-11 from unanticipated prior year federal CCDF carryover funding in 2010-11 to reflect additional costs driven by a court order to extend the date for Stage 3 funding termination from November 1 to December 31, 2010.

• Decreases the Federal 21st Century learning Centers by $23.1 million in 2011-12 to primarily reflect a change in prior year federal carryover funds utilized for this federally funded afterschool program in 2010-11.
• Increases the Early Learning Advisory Council by $948,000 for state operations in 2011-12 from federal funds for the second year of the three-year federal grant recently authorized for the support of state early learning advisory councils.

Department of Social Services


• Eliminates monthly CalWORKs benefits for families that have received aid for 48 months or more. Child-only benefits, provided now when the adult is removed from the case, would continue beyond the 48-month time limit for families fully meeting work participation requirements. Child-only benefits would also continue for families with unaided adult recipients of SSI/SSP and non-needy caretaker relatives. Currently, California provides aid to eligible families up to 60 months and provides benefits to children until the age of 18 years. This new, shorter time limit of 48 months would result in a $698.1 million reduction to the program in 2011-12. This proposal assumes enactment of legislation by March 1 and implementation on July 1, 2011.

• Reduces CalWORKs grants by 13 percent, resulting in a lowering of the maximum monthly grant for a family of three in a high-cost county from $694 to $604 effective June 1, 2011, for a savings of $13.9 million in 2011-11 and $405 million in 2011-12. This proposal assumes enactment of legislation by March 1 to effectuate the June 1 implementation. The current grant level is lower than grants in 20 other states after adjusting for housing costs and has not been adjusted over time to match inflation or increases in the cost of living, thus making it lower than it was in 1989, dollar for dollar. CalWORKs provides benefits to more than 580,000 families with over 1 million children.

• Continues the reduction in the CalWORKs single allocation for 2011-12, resulting in savings of $376.9 million. The single allocation is the funding for CalWORKs employment services, child care, and county administration, the programmatic elements that make the CalWORKs program a welfare-to-work model to enable self-sufficiency over time for unemployed parents and low-income families. This funding reduction severely inhibits the ability for counties to assist needy families in their search for and ability to maintain work that would allow them to meet work participation standards and continue to receive basic assistance to meet shelter, food, clothing, transportation, and other living needs.

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