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Speaker Pérez Announces Vote to Restore Child Care, Preschool Program Funding

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Funding Restores Services to 66,000 Children and Their Working Parents

SACRAMENTO – Assembly Speaker John A. Pérez (D-Los Angeles) today announced that the Assembly Budget Subcommittee voted to restore the child care cuts made in the Governor’s May Revision, while increasing budget debt payments and maintaining a budget reserve consistent with the Governor’s proposal. This funding restoration will restore services to 66,000 children and their working parents.

“Restoring funding to these important programs for California families will protect children and help working parents during these tough economic times,” Pérez said. “It’s not only the right thing to do, it makes good economic sense by providing parents the critical child care resources they need to stay in the workforce.”

The March budget agreement resulted in significant programmatic cuts to the child care and preschool programs. These cuts, totaling over $440 million primarily came from Proposition 98 revenues, and therefore were on top of the roughly $13.4 billion in regular General Fund solutions approved in March.

The Assembly has been working for months with providers, funders and others, including the Governor’s Office and the Department of Finance, to find an ongoing solution to the child care issue, recognizing child care cuts will not only be devastating to the families that rely on these programs to remain employed and become self-sufficient, but will also undermine economic recovery by forcing parents out of the workforce, shutting down small business providers and putting their employees out of work. (The specific impacts of the cuts are listed below.)

Instead of letting these negative impacts of the child care cuts take effect, the Assembly Budget Subcommittee has reversed the cuts without harming the bottom line General Fund reserve and by building on Governor Brown’s “pay down debt” budget proposal.

Here is how it works:

· The Governor proposes to repay $744 million in internal special fund loans. While repaying debt is always a good idea, the first debts repaid should be repayments that will have an immediate economic benefit for our state.

· Therefore, the Assembly Budget Subcommittee’s action repays $1 billion in Proposition 98 “Settle-up” debts, rather than the proposed $744 million in internal borrowing. Settle-up occurs when the state funds Proposition 98 below the annual minimum. According to the Governor’s May Revision, “settle-up” debts make up about $3 billion of the roughly $35 billion in budgetary borrowing.

· With this action, the Assembly Budget Committee has approved the restoration of the Child Care cuts, and will be able to also allocate over $550 million to community colleges and K-12 schools through actions later in the week.

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