On Tuesday, January 10, Governor Brown released his Proposed Budget for 2017/18. The Governor focused on the need for fiscal security and said that the rate of revenue growth in the state is declining, but is still growing. The overall focus is to maintain a large reserve in the face of both fiscal uncertainty and uncertainty from new policies being pursued by President Trump and his administration.

What are the proposals for child care and early learning?

Pause in Reimbursement Rate Increases

The Governor proposes to delay increases to child care reimbursement rates agreed upon in last year’s budget deal.

Regional Market Rate (RMR)

In 2017/18, the RMR will remain at the 75th percentile of the 2014 Survey, essentially annualizing the increases that were implemented on January 1, 2017 and holding at that level.

Standard Reimbursement Rate (SRR)

The 2016/17 Budget Agreement included a 10% increase to the SRR effective January 1, 2017, which meant a 5% increase in this budget year. The Governor’s 2017/18 proposal would freeze the SRR at that 5 % increase level and not annualize the rate to reach the agreed upon 10% increase.

The Governor is also not proposing any Cost of Living Adjustments (COLA) for Child Care or Preschool Programs. K-12 are proposed to see a 1.48% COLA, but this will not be applied to any early childhood programs.

So, what’s next?

Both houses, California State Assembly and California State Senate, will begin to review the proposal with Budget Subcommittee Hearings in the spring. This will be followed by the release of the Revised Proposal in May, which will reflect actual tax revenues after California residents have paid their 2016 taxes. And then, final budget hearings will be scheduled in May and early June. The Legislature is expected to complete an on time proposal by June 15, and then Governor Brown has until June 30 to sign it into law.