Assembly hearing reviews childcare rate-reform transition plan; advocates press for inclusive funding and provider pay

The California State Assembly heard presentations and public comment on a proposed childcare rate-reform transition plan, with the Legislative Analyst's Office (LAO) outlining eight interim steps and advocates urging immediate relief for providers and inclusion of underserved counties.

Dylan Oksalitza of the Legislative Analyst's Office presented the plan, saying “this plan consists of 8 parts and is on page 36 of the agenda.” The LAO described interim rate adjustments to existing rate tables beginning Jan. 1 of the budget year, preservation of the single-rate rule that the higher of the Standard Reimbursement Rate (SRR) or Regional Market Rate (RMR) applies, maintenance of annualized cost-of-care rate supplements, an updated statutory hold-harmless floor, elimination of the private-market cap in the RMR statute, one‑time systems transition funding with JLBC approval for CDSS and CDE, authority for a 2026 cost-study contract, and a requirement that CDSS and CDE collect and report parent co-pay data by county and program annually beginning Jan. 1, 2026.

An administration representative told the committee the administration is working through the rate-and-quality advisory panel to present assumptions, methodology and cost outputs and to solicit public and stakeholder feedback. The representative said the administration is aiming to meet the July 1, 2025, timeline for submitting a detailed cost-model report to the federal government but noted that rate changes historically can be updated and communicated to federal partners as budget agreements evolve.

Public commenters urged that any transition avoid leaving rural and high‑need counties behind. Dave Gordon, county superintendent of schools in Sacramento County, said the Inclusive Early Education Expansion Program (IEEP) “is designed to ensure that all children, especially those with disabilities, can access high quality inclusive preschool programs throughout the state,” and warned that current recommendations would exclude 20 counties from funding. Julie Montale, executive director for early learning at the Sacramento County Office of Education, urged “a coordinated statewide plan” to expand inclusive early learning and emphasized workforce supports and professional learning in underserved counties such as Amador and Del Norte.

Speakers from multiple advocacy and provider groups pressed for enrollment‑based reimbursement (payment by authorized enrollment rather than daily attendance) and for rate calculations tied to cost‑of‑care benchmarks. Lisa Wilkin of the Child Development Consortium of Los Angeles requested funding that counts enrollment rather than attendance so centers can better predict finances and staffing. Christina Gilbert of the Family Resource Center in San Joaquin County asked that “providers be reimbursed based on the federal requirement of child authorized enrollment, whether or not a child attends” and described a voluntary transfer the county used to avoid disenrolling children while slots and funding remained constrained.

Several providers and coalition representatives urged that the alternate methodology use living‑wage benchmarks (some speakers referenced MIT wage benchmarks) rather than lower Bureau of Labor Statistics averages to set reimbursement and that the state honor the pledge to add 200,000 childcare spaces by 2027–28. Elizabeth Parker Phillips of Catalyst Family and other speakers described long wait lists, facility misalignment with TK (transitional kindergarten) expansions and centers that have lost 4‑year‑old enrollment to TK, which limits capacity in the community‑based sector.

Speakers also called for near‑term budget relief for the workforce. Mackenzie Richardson of Thriving Families California said the field needs a cost‑of‑living adjustment in the 2025–26 budget “so we can stop the exodus of child care providers.” Julia Terry of the Child Care Resource Center noted that her organization has 19,000 children waiting for care.

Committee chairs signaled intent to keep the item open for revision and further stakeholder engagement. The LAO offered to continue support on a transition plan. No formal vote or motion was recorded on the record during the hearing.

Why this matters: The transition plan and timetable shape provider reimbursement, workforce wages, and where expansion dollars flow. Advocates warned that interim steps that prioritize existing grantees without targeted supports will leave rural and high‑need counties and children with disabilities behind and that delays or lower interim payments risk program closures and reduced access for families.

Next steps: The committee will hold the item open while the administration and LAO continue refinement and stakeholder engagement ahead of the July 1, 2025, reporting deadline described by the administration.