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Lawmakers press agencies on timeline and public vetting for proposed childcare rate reform
Summary
CDSS outlined public engagement on an 'alternative methodology' to set child‑care rates and scheduled follow‑up Rate and Quality Advisory Panel meetings; providers and advocates urged a swift statutory commitment to enrollment‑based payment and a bridge year to avoid destabilizing programs.
Committee members pressed the Department of Social Services (CDSS) and CDE on the schedule and public process for an alternative methodology to replace the regional market rate survey for child‑care reimbursement.
CDSS officials said they have held extensive public engagement — including a series of Rate and Quality Advisory Panel (RQAP) meetings, focus groups and cost surveys — and reported center‑based cost outputs and selection points at an April RQAP meeting. Jackie Barrosio of CDSS announced a second RQAP session for May 9, 2025, to present family‑childcare selection points and follow‑up results. “We held a special Rate and Quality Advisory Panel meeting where we did share the center based selection points and per child cost outputs resulting from the alternative methodology cost model,” Barrosio said.
CDE staff warned that implementing a new rate structure will require data‑system changes and ongoing resources. Virginia Early said CDE estimates an initial requirement of about $3.5 million and roughly 24 positions to begin system changes necessary to operationalize rate reform and to implement bargaining outcomes, and that those estimates could change as final agreements are reached.
Provider and advocacy testimony at the hearing’s public‑comment segment emphasized urgency. Providers and parent groups asked the Legislature to (1) adopt an alternative methodology in statute as soon as possible, (2) fund providers based on enrollment rather than attendance, and (3) provide a transition or “held‑harmless” bridge year to prevent abrupt revenue cuts. Several family child‑care operators described actual reimbursement amounts that, they said, do not cover costs for non‑traditional hours or care during nights and weekends. Organized bargaining and the California Child Care Providers United (CCPU) were noted repeatedly as parties to ongoing collective bargaining discussions that also inform rate decisions.
LAO and Department of Finance comments focused on fiscal inputs and continued monitoring. The LAO urged careful alignment of statutory COLAs and program components and recommended the Legislature consider a return to enrollment‑based funding that complies with new federal guidance; the LAO also suggested discontinuing pandemic‑era reimbursement flexibilities that disconnect funding from current service levels.
Why it matters: Rate methodology and the decision to pay on an enrollment basis or attendance basis will determine provider revenue, program stability and whether the state meets goals to expand slots without causing closures. Stakeholders warned that improper sequencing or insufficient transitional supports could force some providers to close and reduce access for families.
Ending: CDSS committed to continued public vetting through the RQAP and to publishing the cost model outputs; CDE and CDSS asked the committees for adequate implementation resources and time to update data systems if the Legislature moves forward with statutory changes this budget cycle.
