Appropriations committee adds intent language to hold childcare special-fund balance pending reserve review

The House Appropriations Committee on Jan. 31 reviewed draft language directing that a balance remain in the Childcare Contribution Special Fund while the Legislature considers creating a formal reserve for the Child Care Financial Assistance Program (CCFAP). Grady Nixon of the Joint Fiscal Office introduced the language and said it is intended to preserve an existing balance — about $8,000,000 — until more experience with the program is available.

Why it matters: The language aims to keep payroll-tax revenues intended for childcare from being swept or repurposed before the Legislature decides whether to create a dedicated reserve. Committee members debated whether the provision implemented a reserve immediately or only signaled future intent.

Grady Nixon, Joint Fiscal Office, said, “This would be intent language, to ensure that there is a balance in the fund to support the future establishment of a reserve for the Child Care Financial Assistance Program CCFAP.” Emily (staff member) told the panel the treasurer’s office had recommended keeping the balance in the fund because “we don't have enough experience with this program to be able to say whether or not a reserve is required and necessary in the fund.”

Committee members asked whether the proposed language would prevent use of the money if caseloads required it. Emily explained that the provision does not create an official reserve immediately and that the committee already has separate language allowing the finance and management commissioner to use the human services caseload reserve in the event of revenue shortfalls or expense overruns. She summarized the operational scenarios the committee discussed: the fund could show a positive balance and the deposited funds would remain there; it could be drawn down by program expenses; or, if the fund went into the red, the human services caseload reserve could be tapped to bring it to zero.

Several members voiced concern about special funds being repurposed in past years and sought reassurance. One member said parties had “worked long and hard in childcare to try and finally get some dedicated money towards that,” arguing the language makes clear that payroll-tax dollars “are gonna go to what it's intended for.” Other members asked whether an explicit clause delaying creation of a formal reserve until treasurer review should be added; joint fiscal staff said they settled on simpler intent language after drafting alternatives.

The committee agreed to add the intent language as drafted; staff indicated the language would not, by itself, create a formal reserve. Committee members and staff noted the treasurer’s reserve study will likely need 18–24 months of program data before a definitive recommendation can be made.

The committee scheduled a final discussion and vote on the budget adjustment later in the afternoon when additional members were available.