Budget Adjustments for California’s Subsidized Early Childhood Education and Childcare System

In a significant legislative move aimed at bolstering childcare support, California’s Senate Bill 151 (SB 151) has been enacted, extending provisions initially established during the COVID-19 pandemic. This legislation continues to reimburse childcare providers based on authorized maximum care hours as indicated in a family’s eligibility documentation, rather than the actual hours a child attends childcare. Originally designed as a temporary measure to ensure the financial stability of childcare providers during the pandemic, these rules were set to end in June 2026 but will now be implemented through July 1, 2028.

The extension of this reimbursement model is expected to have a profound impact on the childcare system in California, which has faced unprecedented challenges in retaining providers and ensuring affordable access to care. By maintaining the existing rules, the state aims to provide a more predictable income stream for licensed childcare centers, licensed family childcare homes, and license-exempt providers, which is critical for their operational sustainability.

Furthermore, SB 151 introduces permanent adjustments to the “cost of care plus” rate add-ons, which will benefit subsidized family childcare providers and centers across the state. This program offers supplemental payments to providers based on regional costs and provider types, enhancing the financial viability of these services for families in need. Such financial enhancements are crucial for ensuring that childcare centers and family providers can maintain high-quality services amidst rising operational costs.

In addition, SB 151 outlines a one-time stabilization payment program set to take effect in April 2025, providing 1 for each subsidized child enrolled in licensed family childcare homes and centers, and 0 per child for license-exempt providers. The bill allocates approximately 7.8 million from the General Fund for these stabilization payments, reflecting a state commitment to further support childcare providers and improve the overall ecosystem.

Moreover, SB 151 ensures ongoing funding for essential programs such as the CCPU Training Partnership Fund, the Workers Health Care Fund, and the Retirement Trust, with commitments extending through July 1, 2028. This legislation also ratifies an agreement between the State and the Child Care Providers Union (CCPU), which necessitates legislative approval for certain provisions, underlining the collaborative efforts to improve childcare services in California.

These developments not only address immediate financial concerns but also lay the groundwork for a more stable and supportive environment for child care providers, which is essential for maintaining quality care for California’s children. As the state continues to navigate the aftermath of the pandemic, the passage of SB 151 is a critical step in ensuring that families have access to reliable and affordable childcare services well into the future.

SB 151 amends sections of the Education Code and the Welfare and Institutions Code, specifically sections 8245.5, 10227.5, 10277.1, 10277.2, 10277.3, 10277.4, and 10277.5.