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Legislature should reject Brown’s child care cuts, analyst says

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The Legislature should reject Gov. Jerry Brown’s proposal to cut funding for child care centers that serve poor children, according to the state Legislative Analyst’s Office.

The cuts could lead to the closing of many subsidized child care centers, which collectively serve more than 300,000 children, said a report released last week by the independent analyst.

Brown proposed to cut reimbursement rates by 10 percent for the centers, for budget savings of $68 million, as part of a broader array of cuts.

The state provides subsidized child care to low-income, working parents either through Title 5 centers, named for the state education code, or vouchers that parents can use on their choice of facility. Overall, the governor's proposal would reduce child care spending by 19 percent, or $391 million, on top of steep cuts in previous years, the report said.

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The reductions are expected to cut off services to 63,000 children.

Most of the savings come from making it harder for parents to qualify for subsidized child care. The nonpartisan Legislative Analyst's Office determined that many of the governor's proposals are worth considering, but found the rate cut to Title 5 centers especially problematic.

"We just think that one's not workable," said Rachel Ehlers, an analyst who worked on the report. "Cutting those rates would really result in many of (the centers) closing, and I don’t think that was the intent."

The centers would be particularly hard hit by reimbursement cuts because they can't raise the rates that parents pay to make up the difference, Ehlers said. The centers also can't decrease the number of children they serve or they would get even less money. Plus, the current reimbursement rates already are lower than the rates of many other providers, she said.

Overall, there are only two ways to squeeze budget savings from child care funding: "Serve fewer children or pay the providers less," Ehlers said. 

"There's no low-hanging fruit left," she said.

The system has been buffeted by budget cuts since 2008, resulting in the loss of services to more than 100,000 children, according to Camille Maben, director of child development for the state Department of Education.

Now, with the new proposed cuts, some Title 5 centers are saying they might have to close.

"It’s kind of like the tipping point for many of them," Maben said.

The governor, when he announced his budget in January, acknowledged that cuts to welfare and child care represented "some very painful reductions."

"This is not nice stuff. But that’s what it takes to balance the budget," Brown said at a press conference.

But the cuts go too far, said Linda Asato, executive director of the California Child Care Resource & Referral Network.

Title 5 centers are a safe haven in low-income communities, and with more cuts, they could start disappearing, Asato said. If parents can't get child care, she added, they might quit their jobs and could end up on welfare, at a further cost to the state. 

"It races to the bottom," Asato said. "It doesn’t make financial sense in the short or long term."

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