Joint Fiscal Office explains CCFAP payroll-tax receipts and one-time revenue moves; childcare base not cut

Nolan Langwell of the Joint Fiscal Office returned to the committee to explain recent figures tied to the Child Care Financial Assistance Program (CCFAP) payroll-tax receipts and a proposed one-time swap of general fund and payroll-tax revenue in the FY25 package.

Langwell said there are two separate items often conflated in press coverage: a forecast increase and current-year collections. The first is an upward revision made in July to the payroll-tax revenue forecast that raised the expected receipts by roughly $13.1 million compared with the original budget assumption; the second number that has circulated (~$18.2 million) represents collections to date in the first quarter, not an additional permanent increase.

Langwell explained that the administration's proposed budget adjustment would, in part, use the additional payroll-tax receipts above the original budget estimate to replace general fund in the CCFAP appropriation for this fiscal year. He emphasized the swap is a one-time technical reallocation and does not cut the childcare base: the underlying child-care entitlement benefit and base appropriations were not being reduced. JFO staff said the economists continue to project that the payroll-tax receipts will reach the revised forecast and that the apparent timing differences (Q1 collections vs. full-year estimates) cause confusion in coverage.

Why it matters: Members and advocates had received outreach indicating child-care base funding was being cut; Langwell and staff were explicit that the childcare program's base entitlement is unchanged and that the proposal is a one-time swap of revenue sources in the current year budget.

Questions members raised included whether the tax-department implementation costs reduce the net benefit of the swap, and whether collection timing poses compliance or administrative costs. Langwell said those implementation costs exist but staff were clarifying how much had been appropriated or spent for tax department implementation and would report back.

Ending: Committee staff said they expect a short JFO memo with spreadsheet detail in the coming day; members asked that staff confirm the one-time nature of the swap and identify whether any implementation costs should be reflected in net available resources.