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Key Facts About Child Care and Development Programs in California

THE CALIFORNIA BUDGET PROJECT February 2011

Overview

Californias child care programs provide safe and affordable child care that helps low- and moderate-income parents find and retain jobs. In addition, child development programs provide access to preschool and afterschool options for Californias families. The Governor proposes deep cuts to child care in 2011-12. Total funding for child care and development programs would drop by 18.2 percent between 2010-11 and 2011-12 and would be lower than in 1999-00, after adjusting for inflation. Non-CalWORKs child care funding would drop by 39.7 percent between 2010-11 and 2011-12 and would be lower than in 1996-97, after adjusting for inflation. CalWORKs child care funding would drop to an all-time low in 201112, after adjusting for inflation. Preschool and afterschool funding would remain essentially flat in 2011-12, after adjusting for inflation. Child care is more important than ever as parents struggle to find and retain jobs in the aftermath of the Great Recession.
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Californias Child Care Programs Provide Safe and Affordable Child Care That Helps Low- and Moderate-Income Parents Find and Retain Jobs

Californias Child Care Programs

Californias child care programs typically enroll more than 300,000 children per month. Families may receive child care if a child is under age 13 and parents have a need for care because they are working, seeking employment, or participating in a training program. Families in the CalWORKs welfare-to-work program as well as low- and moderate-income families who are not enrolled in CalWORKs may receive child care. Families must have incomes at or below 75 percent of the state median income (SMI) currently $45,225 per year for a family of three. Many eligible families lack access to child care due to funding constraints. Nearly 188,000 children were on child care waiting lists across the state in June 2010.
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California's Child Care Programs Typically Enroll More Than 300,000 Children Per Month
350,000

300,000

250,000

Average Monthly Enrollment

188,765 200,000

182,129

176,082

183,064

173,883

150,000

100,000 126,575 50,000 129,075 131,440 133,232 133,572

0 2004-05 2005-06 Non-CalWORKs Child Care 2006-07 2007-08 CalWORKs Child Care
Note: Non-CalWORKs child care includes General Child Care, the Alternative Payment Program, and a number of smaller child care programs. Source: California Department of Education, Department of Finance, Department of Social Services, and Legislative Analyst's Office

2008-09

Child Development Programs Provide Access to Preschool and Afterschool Options for Californias Families

The California State Preschool Program

The California State Preschool Program provides full- and part-day preschool services for eligible three- and fouryear-olds. Eligibility is generally limited to families with incomes at or below 75 percent of the SMI currently $45,225 per year for a family of three. However, state law allows up to 10 percent of families served to have incomes somewhat above this income threshold. A total of nearly 131,300 children were enrolled in 200809, the most recent year for which data are available.

State and Federal Afterschool Programs

The state After School Education and Safety (ASES) Program provides educational and academic enrichment services for students in kindergarten through ninth grade. Proposition 49 of 2002 requires the state to provide approximately $550 million each year for ASES, a funding mandate that was triggered in 2006-07. The federal 21st Century Community Learning Centers Program provides additional funding to support afterschool services for disadvantaged K-12 students. Nearly 433,000 children were enrolled in these programs each school day during 2009-10, on average, the most recent year for which data are available.

The Governor Proposes Deep Cuts to Child Care in 2011-12

The Governor Proposes $750 Million in Child Care Cuts

The Governor proposes to: Cut funding for each child care slot by 35 percent for savings of $577 million. This proposal assumes that each family would pay more potentially hundreds of dollars per month to make up for reduced state funding, and therefore that no child care slots would be eliminated due to this reduction. This cut would not apply to CalWORKs Stage 1 child care or to the state preschool program. Eliminate child care for 11- and 12-year-olds for savings of $93 million. Reduce the income limit from 75 percent to 60 percent of the SMI for savings of $79 million. The income limit for a family of three would decline from $45,225 to $36,180 per year a 20.0 percent cut. This reduction would not apply to the state preschool program.
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The Income Limit for Child Care Would Drop by 20 Percent Under the Governor's Proposal
$50,000 $45,225 $45,000

Annual Child Care Income Eligibility Limit for a Family of Three

$40,000 $36,180 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 2010-11 2011-12 Proposed
Source: California Department of Education and Department of Finance

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Total Funding for Child Care and Development Programs Would Drop by 18.2 Percent Between 2010-11 and 2011-12 and Would Be Lower Than in 1999-00, After Adjusting for Inflation

12

Total Funding Would Drop by 18.2 Percent in 2011-12

Total funding for child care and development programs would decline from $3.561 billion in 2010-11 to $2.914 billion in 2011-12, after adjusting for inflation, under the Governors proposals an 18.2 percent drop. Proposed 2011-12 funding would be slightly lower than the 1999-00 inflation-adjusted level of $2.971 billion. Afterschool funding accounts for a substantially larger share of total child care and development funding in 201112 compared to 1999-00. Afterschool funding comprised 2.2 percent of total funding in 1999-00, but is projected to make up nearly one-quarter (23.6 percent) of total child care and development funding in 2011-12.

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Total Funding for Child Care and Development Programs Would Drop Significantly in 2011-12
Afterschool Funding Has Increased From $67 Million in 1999-00 to a Projected $687 Million in 2011-12, After Adjusting for Inflation
$4,500 $3,951 $3,561 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $2,971 $2,914

State and Federal Funding (2010-11 Dollars in Millions)

$4,000

* 2010-11 estimated and 2011-12 proposed. Source: California Department of Education, Department of Finance, Department of Housing and Community Development, Department of Social Services, and Legislative Analyst's Office

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Non-CalWORKs Child Care Funding Would Drop by 39.7 Percent Between 2010-11 and 2011-12 and Would Be Lower Than in 1996-97, After Adjusting for Inflation

15

Funding for Non-CalWORKs Child Care Programs Would Drop Steeply in 2011-12
$1,400 $1,279 $1,316 $1,222

State and Federal Funding (2010-11 Dollars in Millions)

$1,200

$1,000 $825 $800 $738

$600

$400

$200

$0

* 2010-11 estimated and 2011-12 proposed. Note: Non-CalWORKs child care programs include General Child Care, the Alternative Payment Program, a number of smaller child care programs, and child care support services. Source: California Department of Education and Department of Finance

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Non-CalWORKs Child Care Slots Would Drop by More Than 15,000 Under the Governor's Proposals
The Governor's Proposal To Cut Child Care Subsidies by 35 Percent Could Cause Additional Slots To Be Lost
160,000

Number of Funded Slots in Non-CalWORKs Child Care Programs

140,000

133,535 10,180

132,507 7,561 116,977 7,357 38,777 32,404

120,000 37,186

100,000

80,000

60,000 86,169 86,169

40,000

77,216

20,000

0 2009-10 General Child Care 2010-11* Alternative Payment Program 2011-12* Other Child Care
* 2010-11 estimated and 2011-12 proposed. Source: Department of Finance

17

CalWORKs Child Care Funding Would Drop to an All-Time Low in 2011-12, After Adjusting for Inflation

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Funding for CalWORKs Child Care Would Drop to an All-Time Low in 2011-12
$2,000 $1,800 $1,869

State and Federal Funding (2010-11 Dollars in Millions)

$1,600 $1,400 $1,200 $1,049 $1,000 $800 $600 $400 $200 $0

$1,506

$1,171 $1,041

* 2010-11 estimated and 2011-12 proposed. Note: Includes funding for CalWORKs Stages 1, 2, and 3 child care. 2010-11 reflects the Governor's proposal to restore Stage 3 funding effective April 1, 2011. The previous Governor vetoed Stage 3 funding in October 2010. Source: California Department of Education, Department of Finance, and Department of Social Services

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Preschool and Afterschool Funding Would Remain Essentially Flat in 2011-12, After Adjusting for Inflation

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Preschool Program Funding Would Remain Essentially Flat in 2011-12 Compared to Recent Years
$500 $456 $450 $400 $383 $431

State Funding (2010-11 Dollars in Millions)

$350 $300 $250 $200 $169 $150 $100 $50 $0

* 2010-11 estimated and 2011-12 proposed. Source: California Department of Education and Department of Finance

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Preschool Program Slots Would Remain Essentially Flat in 2011-12

125,000 116,832 116,847 116,599

100,000

Number of Funded Slots

75,000

50,000

25,000

0 2009-10 2010-11* 2011-12*

* 2010-11 estimated and 2011-12 proposed. Source: Department of Finance

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Total Afterschool Funding Would Remain Essentially Flat in 2011-12 Compared to Recent Years
$750 $700 $650

State and Federal Funding (2010-11 Dollars in Millions)

$85 $600 $550 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 2005-06 2006-07 $134 $193 $585 Increase reflects implementation of Proposition 49 of 2002

$122

$149

$156

$174

$149

$565

$558

$554

$547

$538

2007-08

2008-09

2009-10

2010-11*

2011-12*

After School Education and Safety Program

Federal 21st Century Community Learning Centers Program

* 2010-11 estimated and 2011-12 projected. Source: Department of Finance

23

State and Federal Afterschool Program Slots Would Remain Essentially Flat in 2011-12
600,000 550,000 500,000 450,000 400,000 530,570 534,121 516,984

Number of Funded Slots

350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2009-10 2010-11* 2011-12*
* 2010-11 estimated and 2011-12 projected. Source: Department of Finance

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Child Care Is More Important Than Ever as Parents Struggle To Find and Retain Jobs in the Aftermath of the Great Recession

25

More Than 1 Million Californians Have Been Looking for Work for At Least Six Months
1,200,000

Number of Jobless Californians Unemployed for At Least 27 Weeks

1,025,000 1,000,000

800,000

600,000

400,000 143,600 200,000

Note: Data reflect 12-month averages ending in the month displayed. Source: Employment Development Department

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The Number of People Looking for Work Exceeds Available Jobs by Five to One
16 15.0 14

Seasonally Adjusted Number of Unemployed and Job Openings Nationwide, November 2010 (in Millions)

12

10

3.2

0 Unemployed Job Openings

Source: US Bureau of Labor Statistics

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California's Median Household Income Has Lost Purchasing Power Since 2006
$60,000 $58,312 $58,000 $58,850

$56,000

$55,132

Median Household Income (2009 Dollars)

$56,134

$54,000 $52,301 $52,000 $51,278

$50,000 $48,279 $48,000 $49,777

$46,000

$44,000

$42,000 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 California US
Source: US Census Bureau

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California's Poverty Rate Increased Significantly Between 2006 and 2009

19% 18%

Percentage of People With Incomes Below the Federal Poverty Line

17%

16% 15.3% 15% 12.9%

14% 12.7% 13% 12.8% 12% 12.2% 11.3% 12.3% 14.3%

11%

10% 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 California US
Source: US Census Bureau 29