Earlier today Governor Newsom signed the early care and education (ECE) budget trailer bill (AB 131) that provides the implementation language for the historic investments in ECE that the state will be making over the next few years. Highlights of the bill include:

  • expansion of Transitional Kindergarten to all four year old children by 2025-26, creating universal pre-K;
  • 120,000 new slots for children and families through the general childcare, state preschool, migrant childcare and voucher systems, rising to 200,000 by 2025-26;
  • the beginnings of rate reform, with providers receiving either the state-wide Standard Reimbursement Rate or the 75th percentile of the Regional Market Rate from the 2018 rate survey (i.e. the rate that is equal to or higher than 75% of providers participating in the state’s Alternative Payment, voucher-based, system in a specific county charged for care in 2018), whichever is higher. In Santa Clara County, where the RMR is considerably higher than the SRR, we anticipate this will lead to significant rate increases for preschool and childcare providers who have contracts with the state;
  • continuing to waive family fees for the rest of the school year;
  • $250 million for ECE infrastructure grants
  • $250 million for ECE workforce development grants

These funding and policy changes will remake the ECE landscape in Santa Clara County and California  and will shine a spotlight on the remaining constraints to equitable access: a lack of ECE facilities and the need for well-trained and compensated staff to serve new enrolled children.