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Governor's 2013-14 Revised Budget (May Revise)

Conference Call Notes
May 22, 2013


The May Revise proposal states the intention to realign Stages 2 and 3 child care programs from the CDE to the counties in an unspecified out-year.

May Revise realignment proposal details in budget year (BY) 2014–15:

Nothing proposed in BY 2014–15 to shift programmatic administration of child care programs.

  • Begins to move fiscal administration of health care programs from the counties to the state by shifting $300 million to the state. Counties will use this savings for administering social services programs, including CalWORKs, CalWORKs-related child care (Stages 1, 2, and 3) and CalFresh administrative costs.
  • Does not specify the time period when programmatic responsibilities would begin to shift from the state to the counties, nor does it specify the length of time the shift would take.

The Superintendent is adamantly opposed to any realignment of the CalWORKs Stage 2 and Stage 3 programs to the counties.

Thank you to the field and to the California State Association of Counties (CSAC) for voicing opposition to the Governor’s realignment proposals.

We need to continue to advocate for the Legislature and the CSAC to oppose realignment.
Stage 3

During the Senate Budget and Fiscal Review Sub-Committee #1 hearing on May 2, the CDE stated the Governor’s January budget proposal for Stage 3 was $35 million too low based upon the CDE’s March caseload data.

The May Revision proposal further decreases funding for Stage 3 by $15 million. In addition, it proposes to further reduce Stage 3 by an additional $14 million to account for the federal sequestration cuts.

This combination of cuts will leave Stage 3 funded at $64 million below caseload.

Note: The CDE shared this projection with the Administration and the Legislature after the release of May Revise.

The CDE estimates the $64 million funding gap represents approximately 10,000 otherwise eligible children who would not be served in Stage 3 in BY 2014–15.

Note: This estimation was calculated based on using CDE contractor data to assess total contractor caseload, calculate the total costs for that caseload, and then subtract the May Revise amount from CDE’s total projected caseload costs. That amount was then divided by the average cost of care per child, in order to produce an approximate child count.

Stage 3 should be a caseload-driven program to meet the need of all State 3-eligible families. The Administration and the Legislature should fully fund this program.

Stage 3 should not have to shoulder the sequestration cuts.

We need to advocate to the Administration and the Legislature that any sequestration cuts to these programs should be backfilled by the state.


The Administration did allocate some growth dollars to preschool and child development programs. However, the system has taken nearly $1 billion in cuts since BY 2008–09 and funding needs to be fully restored to all of these programs.

Given the cuts these programs have taken and the field’s strong advocacy for reinvestment, it was very disappointing that the May Revise did not include funding restoration.

The Superintendent believes now is the time to restore and reinvest in both Proposition 98 and Non-Proposition 98 early learning and educational support programs. This conversation needs to happen at the same time as the Local Control Funding Formula to ensure these programs get their fair share.

To restore the part-day preschool program to pre-recession levels, $120 million in Proposition 98 funds is needed. If you include the losses to full-day preschool services, a total reinvestment of $172 million is needed.

The Superintendent is in strong support of moving all programs back into Proposition 98: all Alternative Payment programs, including CalWORKs Stages 2 and 3, center-based programs, local planning councils, resource and referral programs, and quality improvement projects.

While there is potential Proposition 98 growth from increased revenue and the passage of Proposition 30, we should seize the opportunity to re-bench Proposition 98 to include all of these programs.

These programs should be a part of one, continuous system of education and care from birth to early adulthood. We need to continue to advocate this vision to both the Administration and the Legislature.

If K–12 programs are going to see increased funding, especially for low-income and English learner children, early learning and educational support programs deserve regrowth as well—as these programs serve the lowest income, most vulnerable children in California.

These essential services begin at birth in early learning and educational support programs, not just at entry into transitional kindergarten or kindergarten.

The Superintendent will continue to advocate for:
  • Updating the Regional Market Rate (which has been frozen since BY 2006).
  • Reviewing eligibility thresholds for subsidized programs across the board.
  • Updating the Standard Reimbursement Rate (which has not kept up with the cost of living adjustments provided to K–12).
  • Updating the infant-toddler reimbursement factor.
  • Opposing realignment in any form.
  • Fully funding Stage 3 as a caseload-driven program.
  • Fully restoring funding and moving all programs back into Proposition 98 this budget year.
  • Fair share restoration for Preschool/Child Development programs in Proposition 98.
Questions:   Early Education and Support Division | 916-322-6233
Last Reviewed: Tuesday, February 10, 2015

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