Summary of FY 2016-17 Child Care / Early Education Items – June 27, 2016

On Monday, June 27, 2016, Governor Jerry Brown signed into law the Budget Act 2016 before the June 30 deadline. Although, the Budget Act 2016 becomes law and goes into effect on July 1 of the new fiscal year, certain provisions within the budget act are set to begin at a later date during FY 2016-17. Highlights of the Budget Act 2016 for funding of Child Care and Early Education items are as follows:



  • The regional market reimbursement rate for providers accepting vouchers will be updated from a rate based on a combination of the 85th percentiles of the 2005 and 2009 regional market rate surveys to the 75th percentile of the 2014 survey. The new rate goes into effect on January 1, 2017. This update includes a limited-term hold harmless for providers whose rates would be otherwise reduced, effective through June 30, 2018.
  • In addition, the rate for licensed-exempt providers will be increased from 65 to 70 percent of the licensed family child care home provider rate, beginning January 1, 2017.
  • Trailer bill includes language identifying the intent of the Legislature, in future years, to update the regional market reimbursement rate to the most recent regional market rate survey and to reimburse providers at the 85th percentile, to the extent funding is available.
  • The standard reimbursement rate will be increased by 10 percent, beginning January 1, 2017. This is the reimbursement rate for child care providers contracting directly with the state, including State Preschool providers.
  • Trailer bill includes language identifying the intent of the Legislature to provide future child care and early education reimbursement rate increases reflecting increased costs to providers resulting from the increase in the minimum wage.


  • Funding for 8,877 full-day/full-year State Preschool slots for local educational agencies will be added in each of the next three years with 2,959 slots being added on March 1 of 2017, 2018, and 2019.

Total Package: $52.9 million Proposition 98 and $93.8 million General Fund in 2016-17.  

Full Day State Preschool Slots

2016-17 2017-18 2018-19 2019-20
COLA (Rate Adjustment) 0.00% 1.11% 2.42% 2.67%
Full-Year Slot Cost $10,595 $10,713 $10,972 $11,265
Start Date March 1, 2017 March 1, 2018 March 1, 2019 Total Slots


Full Year

New Full-Year Slots 2,959 2,959 2,959
Costs Over 2016-17 $7,837,838 $39,624,192 $73,049,576 $100,000,000


Once the new fiscal year begins on July 1, the Early Education and Support Division will begin implementation of the enacted legislation through management bulletins and request for applications for the preschool funding.


Message from the California Department of Education’s Early Education and Support Division.