Assembly hearing: advocates, providers warn May revision undermines child care progress; administration defends technical funding for federal changes

Assemblymember Phil Ting Jackson, chair of the Assembly Budget Subcommittee No. 2 on Human Services, opened a May revision hearing on child care by saying the state faces “one of the more difficult budget problems since the Great Recession” but emphasized a priority to “ensure our most vulnerable Californians stay housed” and that child care remain a core investment.

Majority Leader (as identified in the hearing) told the committee the May Revision “fails to adopt the urgent need for child care rate reform and slot expansions,” urged the Legislature to “reject all cuts to child care and to restore the cost‑of‑living adjustment known as the COLA,” and said the May Revision breaks a promise to add 200,000 subsidized slots announced in 2021.

Jennifer Troia, director of the California Department of Social Services, summarized the administration’s May Revision outline for child care and development: $6.8 billion total funds in 2024–25 and $6.4 billion in 2025–26, maintenance of about 46,000 slots added since 2021–22, and funding to begin administrative work required to implement a federally required shift to prospective payments for providers. Troia said the administration expects a federal waiver delays full prospective‑pay implementation until August 2026 but included funding for local administrative support, automation, and state positions to prepare.

Troia described specific items in the May Revision: $43.8 million to support local administrative costs tied to prospective payments, $8.2 million for automation, six state positions, and $21.8 million in one‑time federal funds to support startup automation activities for the single‑rate structure. She also said the May Revision suspends the 2025–26 child care/preschool COLA (scored at about $60 million general fund savings) and reduces the Emergency Child Care Bridge program for foster youth by $42.7 million; the administration said the reduction “aligns with utilization” and is not intended to disenroll current participants.

Bill Knox of the Legislative Analyst's Office said the office is still reviewing details but raised concerns about exempting rate‑reform automation from Department of Technology review and asked for more legislative oversight and detail on how the administration scored the proposed automation and prospective‑pay costs.

Virginia Early of the California Department of Education said CDE appreciates continued prioritization of early education in a difficult budget year but flagged that the May Revision does not include needed ongoing resources for CDE to implement rate reform (she said CDE needs roughly $3.5 million and 24 ongoing positions to support its portion of rate reform). Early also asked that if prospective pay is extended to the California State Preschool Program, CDE would need parallel resources and technical assistance to implement that change.

Members of the Legislature and witnesses focused repeatedly on wildfire impacts in Altadena and other communities. Claire Ramsey of DSS said the department has been actively working with affected providers, licensing and local jurisdictions to expedite temporary licensing and support displaced providers. Multiple family child care providers testified during public comment about losing homes and businesses to the Eaton Fire, difficulties accessing small business loans or FEMA assistance, and out‑of‑pocket costs to repair or replace equipment. Felisa Wright, a home provider from Altadena, said she lost her home and business in January’s fire and urged immediate support for rebuilding and affordable housing for providers.

Advocates asked the Legislature to codify the alternative methodology for rate setting, to resume progress toward the 200,000‑slot goal, to restore the COLA, and to protect bridge vouchers for foster youth. Every Child California and the Child Care Law Center urged paying based on enrollment (not attendance) and called for targeted support for providers affected by disasters.

The administration repeatedly described the May Revision as maintaining current rate levels (cost‑of‑care‑plus payments) and funding preparatory, time‑limited activities tied to federal requirements. No final budget decision was made in the hearing; the May Revision items discussed are proposals the Legislature may accept, reject, or change.

What happens next: the panel’s discussion included requests from legislators for more detail and for written responses from the administration and Department of Finance on cost and timeline assumptions. Lawmakers and advocates said they plan to press for alternatives that preserve provider pay and expand access rather than pause or reverse recent investments.

Ending note: the hearing combined technical budget questions about federal compliance and automation with personal testimony from providers who lost homes and classrooms to recent fires, highlighting the political and human stakes of the May Revision proposals.