San Mateo and San Francisco Counties: Individualized Subsidy Pilot Projects

1. San Mateo and San Francisco Counties: Individualized Subsidy Pilot Projects

2. Overview of the Pilots • Reasons for the Pilots • Legislative Background and Limitations • Changes for Providers and Families • Goals and Outcomes

3. 1. Reasons for the Pilots

4. Exploring solutions to a “one-size-fits-all” subsidy system: The pilots seek to demonstrate the effect of limited local control and flexibility to meet the goals of family self-sufficiency and to stabilize a fragile child care infrastructure.

5. High cost counties find that: • The uniform state income cutoff does not reflect high costs of living • The uniform SRR does not reflect high costs of providing care • Rules create disincentives for families to increase earnings

6. The pilots seek to address two fundamental concerns: • Families barely earning enough to meet the high cost of living in these counties are nevertheless considered too high income to qualify for child care subsidies.

7. State reimbursement rates to direct service contractors are too low to cover costs and contractors cannot utilize their full allocation of state and federal child care and child development funds. • As a result, fewer children are subsidized and child care spaces are lost to the counties.

8. 2. Legislative Background and Limitations

9. AB1326 and SB701 • San Mateo’s Pilot was authorized by Assembly Bill 1326, passed in October 2003 and implemented in 2004/2005. • San Francisco’s Pilot was authorized by Senate Bill 701, passed in September 2005 and implemented in 2005/2006. • Each are five year pilots.

10. The bills authorize each county to develop and implement an individualized county child care subsidy plan, but provide only limited flexibility.

11. Four Limitations: • No family who would have been eligible under state rules can either become ineligible or be asked to pay higher family fees. • Provider participation is entirely voluntary. • The number of child days of enrollment across participating providers must increase overall from the base year. • There are no additional resources for the pilots – only unearned and unallocated funds from existing contracts and CDE funding streams may be used.

12. 3. Changes for Providers and Families

13. Changes for participating providers: • Subsidized families can earn higher incomes and remain eligible • Families above the old income threshold pay higher family fees • The standard reimbursement rate increases • Contracts renegotiated to maximize the use of contracted funds

14. Changes for subsidized families: • Families can remain subsidized up to a higher income threshold. • Creates greater continuity of care • Reduces costs for families above the current cutoff • Allows families to transition to the full cost of care

15. Increase in income limits for participation in subsidized care. • Entrance requirements remain the same (75% of “benchmark” SMI) • But families may now stay in subsidized care up to 85% of current SMI

16. A new fee schedule for the transition range. • Fee schedule in transition range aims to protect families from the actual cost of care so that families can remain in high quality care as long as possible: • Families pay approximately 10% of income • This is a shift in focus from the original pilot rules.

17. A reallocation of funds across providers. • Funds reallocated from contractors who are not fully earning to contractors who can increase enrollment in order to ensure increase in overall child days of enrollment across contractors.

18. Higher reimbursement rates for participating contractors. • Pilot contract terms provide higher reimbursement rates. • The size of the increase varies by contract type and county (based on resources).

19. 4. Goals and Outcomes

20. Five goals matched to five outcome measures: • Increase the retention of Title V center-based child care and development services contractors. • Increase the aggregate child days of enrollment in subsidized care. • Increase the ability of low-income families to move toward self-sufficiency through higher earnings. • Increase the stability of care placements. • Maximize the take-up of child care and child development subsidy allocations.

21. 1. Increase Retention • Measured as the number of Title V contractors providing services each year:

22. 2. Increase child days of enrollment • Measured through contractor submitted attendance and fiscal reports:

23. 3. Increase earnings: • Measured by looking at change in monthly income from year to year. • Data collected through census of all children in subsidized care and follow-up survey of families who left care.

24. 4.Increase child care stability: • Measured through census of children enrolled in care and follow-up surveys of sample of families who leave care.

25. 5. Maximize the take-up of funds: • Measured as unearned contract allocations among direct service contractors.