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.
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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.
