Assembly Dems restore child care money, using $1 b in settle-up money

Assembly Speaker John Perez moved Wednesday to reverse deep cuts to state support of child care programs by proposing repayment of $1 billion in Proposition 98 settle-up" funds.

As crafted, the plan would not only restore badly-needed services to some 66,000 low-income children and their families - but it would also provide an additional $550 million in one-time funds to K-12 schools and community colleges.

Supporters also noted that it falls into line with the governor's goal of paying down the state's debt.

"We want to be in line with his commitment to pay off debt - but there's debt owed schools, too," noted Assemblywoman Susan A. Bonilla, D-Concord, chair of the Subcommittee on Education Finance - which along with the Subcommittee on Health and Human Services adopted the Speaker's plan as part of their budget Wednesday.

The $440 million cut to child care, adopted and signed into law in March, was among the hardest spending reductions Democrats accepted to close half of the state's $20-plus billion shortfall in 2010-11.

With news from the administration that revenues were projected to be $6.6 billion ahead of the January estimates - many in the majority party were anxious to reverse the hit to child care.

As proposed, $1 billion of the unanticipated revenue would be earmarked as "settle-up" funds - money constitutionally owed to schools when the Proposition 98 guarantee increases after a budget has been enacted.

The Speaker's office reported Wednesday that currently there are $3 billion owed schools under the settle-up requirement.

Legislative staffers said Wednesday that the remaining settle up funds - some $550 million - would be divided among other K-12 and community college programs with details coming out later this week.

Advocates for low-income families, parents and child care providers inundated the state house Wednesday for hearings on the cuts both in the Assembly and in the state Senate.

The Senate budget subcommittee overseeing school finance held its first hearing on the revised May budget and while much of its day was focused on child care, the settle-up proposal was not introduced and no action was taken.

Speaker Perez pointed out in a statement that Gov. Jerry Brown had proposed in his May plan using $744 million of the unanticipated revenue next year to repay debt owed to special funds - but his proposal solves two problems.

"Restoring funding to these important programs for California families will protect children and help working parents during these tough economic times," Pérez said in a statement. "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."

According to documents released by child care and preschool organizations, the combination of the reductions will cause 75 percent of programs to be shut down; 96 percent of programs to drop families from their services and 91 percent of programs to lay off staff.