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key takeaway

California has a significant unmet need for affordable child care, with only a fraction of eligible children receiving subsidized care. The state needs to make significant and sustainable investments in expanding subsidized child care options, particularly for infants and toddlers.

Affordable child care is critical for supporting California’s families to grow and thrive. Within California’s mixed delivery system, the California Department of Social Services (CDSS) provides child care programs at low- to no-cost for families with low incomes. For far too long, the demand for subsidized child care has outpaced supply. Specifically:

  • In 2015, 85% of children eligible for subsidized child care did not receive services.
  • In 2017, 89% of children eligible for subsidized child care did not receive services.

An analysis of 2022 data shows an unfortunate continuation of this trend, underscoring the need for a larger supply of subsidized child care spaces in California. 

Child Care and Development Transition

This analysis only includes child care programs within CDSS. The 2020-21 Budget Act transferred the child care and development programs from the California Department of Education (CDE) to CDSS. This transfer was intended to support a more integrated and coordinated system of care that could more effectively serve children, families, and the workforce. Thus, as of July 1, 2021, CDE only maintained oversight of two early learning programs: 1) The California State Preschool Program (CSPP); and 2) Transitional Kindergarten (TK) — both of which are now a part of CDE’s “Universal Pre-K” system. Previous Budget Center analyses of unmet need included CSPP. However, given the transition of programs from CDE to CDSS and related changes to eligibility requirements and other aspects of these programs, this analysis does not include CSPP. A forthcoming publication will explore eligibility and enrollment specific to CSPP. 

What is the unmet need for child care?

In 2022, only one in nine of California’s children eligible for child care actually received services. The number of children eligible for subsidized child care has grown from 1,479,000 in 2015 to 2,161,000 in 2022. While the number of new subsidized child care spaces has increased — notably, 146,000 new spaces were added since 2021-22 — the number of new slots has not kept pace with the growing demand. The chart below provides a visual of the unmet need for child care in California.

What are the implications of failing to meet California’s child care needs?

Families of color in California have historically been denied access to key services and opportunities. These inequities continue to negatively impact Californians of color as recent analyses have shown that poverty rates nearly doubled for Black and Latinx adults in California from 2021 to 2022. Moreover, Californians of color are more likely to struggle with paying for basic expenses.

The chart below shows that children of color are disproportionately eligible for subsidized child care. As the supply of subsidized child care continues to far outpace demand, families of color are most impacted by this insufficient supply. Therefore, the lack of subsidized child care continues to exacerbate the historical and unjust inequities that impact Californians of color.

CDSS’s child care and development programs serve ages zero to twelve. Within this age range, the cost of providing care is the highest for infants and toddlers; yet, providers that serve infants and toddlers typically make less money. Given this context, as well as the potential impacts of TK expansion on the mixed delivery system, there is concern around a diminishing supply of infant and toddler care options.

The chart below shows that across all age groups, only a fraction of those eligible for care are actually enrolled. However, children ages 0-2 are the only age group that is solely served by CDSS’s child care programs (other age groups have access to programs hosted by CDE). Thus, the unmet need for child care is particularly acute for infants and toddlers and failure to expand subsidized child care may disproportionately impact this age group. While school-age children have access to alternatives, it's important to note that the unmet needs stretch beyond infants and toddlers.

How can policymakers address the unmet need for child care?

While the supply of subsidized child care has increased since the dramatic cuts made during the Great Recession, California is still a long ways away from meeting families’ child care needs. Specifically, to help address the unmet need for child care, the 2021-22 enacted budget set a goal of adding 200,000 new child care slots. While 146,000 of these slots have been funded, slot expansion has been delayed for the last two fiscal years. The governor maintains his commitment to fund all 200,000 slots by 2026-27; however, the timeline for funding the remaining 54,000 slots by the deadline remains unclear.

The administration can increase the number of new slots in the 2024-25 budget to make immediate and needed progress on addressing the unmet need for child care. The unmet need for child care in California is an issue that requires state leaders' attention regardless of the cyclical ups and downs of the state budget. State leaders should make significant and sustainable investments in increasing access to affordable child care that meets families’ needs. Failure to do so keeps thousands of families — mainly families of color — on child care waiting lists, hampering their economic mobility and ability to find nurturing care for their children.

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Read this publication in English.

El paquete del presupuesto de 2023-24 incluye varios avances de políticas clave para el aprendizaje y el cuidado infantil. Estos avances ayudarán a expandir el acceso a los programas de aprendizaje y cuidado infantil en California y aumentará temporariamente las tasas de pago de los proveedores de estos servicios. La reforma de tarifas familiares es uno de estos pasos significativos. Específicamente, el presupuesto de 2023-24 incluye $78.4 millones de dólares para la reforma permanente de las tarifas familiares a partir del 1 de octubre de 2023. De acuerdoa la nueva estructura de tarifas familiares: 

  • Las familias con ingresos inferiores al 75% del ingreso medio estatal ya no pagarán tarifa alguna por el cuidado infantil subsidiado;
  • Las familias con ingresos equivalentes al 75% del ingreso promedio estatal o más pagarán tarifas máximas equivalentes al 1% de sus ingresos mensuales; y
  • Se eliminarán las tarifas familiares que se deben de antes del 1 de octubre de 2023. 1Los costos de eliminar el pago de las tarifas familiares atrasados se abordaron en dos proyectos de ley, el proyecto de ley de la asamblea legislativa 100 y el proyecto de ley de la asamblea legislativa 110, y por lo tanto no forman parte de los fondos adjudicados por el presupuesto de 2023-24 para la reforma de tarifas familiares.

Un informe anterior copublicado con Voces de Padres hizo hincapié en el programa de tarifas propuesto por Voces de Padres y cuánto hubieran pagado las familias con el programa de tarifas aprobado antes del presupuesto estatal de 2023-24 (llamado “programa original”) y cuánto hubieran ahorrado con el programa de tarifas propuesto por Voces de Padres. Desde que se hizo ese análisis, el Departamento de Servicios Sociales de California (CDSS, por sus siglas en inglés) ha confirmado el nuevo programa de tarifas familiares para 2023-24 (llamado “programa nuevo”). Se incluyeron la mayoría de los principios propuestos por Voces de Padres en el nuevo programa, a excepción de dos diferencias clave: 1) el CDSS no eliminó las tarifas de las familias de tiempo parcial; 2) el nuevo programa no incorpora la escala de precios variable (basada en los ingresos) propuesta por Voces de Padres.  

De acuerdo con el nuevo programa, las familias que ganan entre el 75% y el 85% del ingreso promedio estatal pagarán una tarifa máxima del 1% de sus ingresos mensuales. El porcentaje exacto difiere según el tamaño de la familia. La tabla a continuación muestra qué porcentaje de los ingresos de la familia se gastaba en con el  programa original y lo compara con cuánto se gastará con el nuevo programa para las familias al 75% del ingreso promedio estatal, por tamaño de familia.

Con el nuevo programa de tarifas familiares, en algunos casos, las familias recuperarán aproximadamente el 10% de sus ingresos anuales. La gráfica a continuación muestra la cantidad de dinero que hubiera pagado en tarifas una familia de dos personas con el programa original y cuánto pagará con el nuevo programa. La tabla correspondiente muestra cuánto ahorrará una familia de dos con el nuevo programa de tarifas familiares.

Los miles de dólares ahorrados por año por muchas familias de toda California las ayudará a pagar sus necesidades básicas tales como los alimentos, el alquiler, y los servicios públicos. En vista del dramático aumento de la pobreza en toda California causada por el vencimiento de la asistencia federal temporaria promulgada para abordar los efectos económicos de la pandemia, la reforma de las tarifas familiares ofrece un cambio de política muy necesario para proporcionar a las familias, y en especial las familias de color de bajos ingresos, los recursos que necesitan para prosperar. 

Foto de encabezado por Allison Shelley para EDUimages.

  • 1
    Los costos de eliminar el pago de las tarifas familiares atrasados se abordaron en dos proyectos de ley, el proyecto de ley de la asamblea legislativa 100 y el proyecto de ley de la asamblea legislativa 110, y por lo tanto no forman parte de los fondos adjudicados por el presupuesto de 2023-24 para la reforma de tarifas familiares.

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key takeaway

California’s 2023-24 budget includes $78.4 million for permanent family fee reform, eliminating fees for families below 75% of the state median income and capping fees at 1% for other families.

Lea esta publicación en español.

The 2023-24 enacted state budget package included several key policy advances for early learning and care. These advances will help to expand access to early learning programs in California and temporarily boost rates for providers. Family fee reform represents one of these significant steps forward. Specifically, the 2023-24 budget includes $78.4 million for permanent family fee reform beginning October 1, 2023. Under the new family fee structure: 

  • Families below 75% of the state median income (SMI) will no longer pay a fee for subsidized child care;
  • Families at or above 75% of the SMI will have fees capped at 1% of their monthly income; and
  • Family fees owed before October 1, 2023 will be waived. 1Costs for waiving past due family fees were addressed in two early action bills — Assembly Bill 100 and Assembly Bill 110 — and are therefore not a part of the 2023-24 enacted budget allocation for family fee reform.

An earlier report co-published with Parent Voices highlighted Parent Voices’ proposed fee schedule and how much families would have paid under the family fee schedule approved prior to the enacted state budget (referred to as the “original schedule”) and how much they would have saved with Parent Voices’ proposed fee schedule. Since this analysis, the California Department of Social Services (CDSS) has confirmed the new family fee schedule for 2023-24 (referred to as the “new schedule”). Most principles proposed by Parent Voices were included in the new schedule, with the exception of two key differences: 1) CDSS did not eliminate part-time family fees; 2) the new schedule does not incorporate the sliding scale (based on income) proposed by Parent Voices.  

Under the new schedule, families earning between 75% and 85% of SMI will pay no more than 1% of their monthly income in fees. The exact percentage differs slightly based on family size. The table below shows how much of a family’s income was spent on family fees under the original schedule compared to how much will be spent under the new schedule for families at 75% SMI, by household size.

With the new family fee schedule, in some cases, families will recoup nearly 10% of their annual income. The chart below shows the amount of money a two-person family would have paid in fees with the original schedule and how much they will pay with the new schedule. The corresponding table shows how much a family of two will save with the new family fee schedule.

The thousands of dollars saved annually by many families across California will support them with paying for basic needs such as food, rent, and utilities. Given the dramatic increase in poverty across California, as a result of the expiration of temporary federal aid enacted to address the economic effects of the pandemic, family fee reform is a much-needed policy change to provide families, particularly families of color with low incomes, with the resources they need to thrive. 

Banner photo by Allison Shelley for EDUimages.

  • 1
    Costs for waiving past due family fees were addressed in two early action bills — Assembly Bill 100 and Assembly Bill 110 — and are therefore not a part of the 2023-24 enacted budget allocation for family fee reform.

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About this event

Children and their families deserve access to affordable and reliable early learning and care options that promote whole-child development and support family well-being. Moving toward a mixed early-learning delivery system can help make this a reality for California families. 

Join us to learn more about California’s current early learning system and how policymakers can strengthen the workforce and support transitioning to a mixed-delivery system that better supports whole-child development. 

You’ll hear from researchers, advocates, and providers about their efforts to build affordable and reliable early learning and care services that meet each family’s unique needs. 

What is a Mixed-Delivery System?

A mixed-delivery system is a combination of programs, providers, and settings that allow families to choose the option that best meets their needs, such as the location, hours, and curriculum.

Thank you to our event sponsors

Blue Shield of California Foundation, Heising Simons Foundation, James Irvine Foundation, Hilton Foundation

About the California Budget & Policy Center

The California Budget & Policy Center is a research and analysis nonprofit advancing public policies that expand opportunities and promote well-being for all Californians.

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