Legislature presses for 'true cost' child-care rate reform as July 1 federal deadline nears

A joint informational hearing of California Assembly budget subcommittees on human services and education held public testimony and a policy briefing focused on implementing an "alternative methodology" to set child‑care reimbursement rates by the federal and state deadline of July 1, 2025.

The hearing brought together legislators, the Legislative Analyst's Office, Department of Social Services staff, the Department of Finance, providers and union negotiators to review where the state stands in moving from market‑based rates to a cost‑estimation model that would set a single, statewide reimbursement structure. Officials and advocates said the policy aims to pay providers the true cost to deliver care, but they disagreed about whether the state has an adequate funding plan and whether collective bargaining has advanced enough to meet the deadline.

The Legislative Analyst's Office presented the current baseline: two existing rate systems (a fixed statewide standard reimbursement rate and a regional market rate set at a 2018 market survey percentile), temporary monthly cost‑of‑care‑plus payments and a multi‑step federal approval process. "The state currently has two rates," Dylan Hoxworth Lehi of the LAO said, noting the standard reimbursement rate is roughly $54.93 per…