Early childhood education and childcare.

The California Senate Budget and Fiscal Review Committee has put forward comprehensive changes to the state's early childhood education and childcare system, introducing a new reimbursement methodology and extending critical funding mechanisms through 2026. The legislation transitions away from regional market rate surveys toward a unified rate structure that accounts for geographic variations, care settings, and regulatory requirements.

The bill extends the monthly cost of care plus rate payments through June 2026, with amounts ranging from $98 to $211 per child based on provider type and region. Starting July 2025, childcare providers will be reimbursed based on families' certified needs rather than actual attendance, supported by an $88.5 million allocation from the General Fund. The legislation also reduces the documented need threshold for daily rate reimbursements from six to five hours.

For families receiving subsidized care who add children during their eligibility period, the bill extends the eligibility timeframe to ensure the additional child receives at least 12 months of coverage before redetermination. The measure maintains existing eligibility priorities, with first consideration given to children receiving protective services or at risk of abuse and neglect, followed by income-eligible families.

The legislation implements quarterly reporting requirements through July 2027 to track progress on prospective payments and enrollment-based reimbursement. While cost-of-living adjustments remain suspended through fiscal year 2025-26, the bill establishes their resumption in July 2026, with rates adjusted annually thereafter according to legislative appropriations.