Senate subcommittee grills administration over May Revision child care shifts as providers sound alarms
May 21, 2026 | California State Senate, Senate, Legislative, California
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A California State Senate subcommittee on Thursday examined the administration's May Revision proposals for child care, pressing officials on why the plan shifts funding reductions into the voucher‑style Alternative Payment (CAP/AP) program, reduces the advertised COLA percentage and converts temporary administrative funds into a permanent percentage‑based payment.
Chief Deputy Director Claire Ramsey of the Department of Social Services told the committee the May Revision increases the department's child care budget to about $6.8 billion for 2026–27 and applies a 2.01% COLA for child care providers, which the department estimates will cost about $112 million. "The May revision for the Department of Social Services overall includes more than $67,000,000,000 in local assistance funding for FY 26‑27," Ramsey said in opening remarks, and she described steps to avoid disrupting children currently enrolled.
Ramsey and Deputy Director Jaime Milam said the administration used data on contractor relinquishments and unspent awards to justify reallocating some reductions between CCTR (center‑based) slots and CAP voucher funding. Milam said relinquishments are a common part of contracting when agencies cannot ramp immediately: "Sometimes this happens in a one‑time basis," she said, and CDSS typically redirects relinquished funds within the same county to avoid disenrollment.
But lawmakers pushed back. One committee member said the May Revision scores the same dollar savings whether the reduction is taken from CCTR or CAP, yet removing slots from CAP affects more families because CAP slots cost less per slot. "If we're scoring the exact same amount of money, why remove more slots?" the member asked.
The Legislative Analyst's Office echoed that point. Dylan of the LAO said shifting reductions into CAP "presents some trade‑offs" because CAP generally reaches families faster but, because its cost per slot is lower, a given dollar reduction eliminates more funded slots. The LAO recommended the legislature ask the administration for additional justification for applying reductions to CAP and to consider applying any rate increases consistently across all programs.
Officials also defended a proposal to reclassify $70 million in out‑of‑contract administrative support as an increased administrative percentage (a 1.5 percentage‑point raise in the AP administrative rate). That change, CDSS said, would create clearer reporting and long‑term stability for contractors. "Bringing them into the admin and increasing the admin by the 1.5% then it become[s] a permanent ... in their admin," CDSS testified. Lawmakers warned a percentage‑based approach could grow future general‑fund obligations if slot counts or rates rise.
The May Revision also proposes reversing earlier one‑time costs for implementing a prospective‑pay requirement that the federal government has rescinded. CDSS cited a May 12, 2026, CCDF final rule that returns the option to states to pay providers prospectively or by timely reimbursement; as a result, the administration proposes reverting the previously budgeted one‑time implementation funding.
Providers and advocates told the committee the proposed shifts would not match the on‑the‑ground need. Donna Snaringer of the Child Care Resource Center in Los Angeles said her program "has not enrolled a family since March 2025" and carries about 35,000 children on its waiting list; she urged the legislature to prioritize using unspent funds to preserve existing slots rather than making permanent reductions.
Numerous public commenters, including family child care providers and coalition representatives, urged lawmakers to reject cuts to general child care (CCTR) and AP funding, to adopt a higher COLA that more closely tracks the K‑12 increase, and to restore funding for promised expansion slots.
Committee members held the items open for further review and asked CDSS and the Department of Finance to supply more granular analyses on slot impacts, the projected trajectory of relinquishments and alternative structures for funding administrative support.
The subcommittee paused the item after an extended Q&A and moved to a recess before the hearing's health portion.
Chief Deputy Director Claire Ramsey of the Department of Social Services told the committee the May Revision increases the department's child care budget to about $6.8 billion for 2026–27 and applies a 2.01% COLA for child care providers, which the department estimates will cost about $112 million. "The May revision for the Department of Social Services overall includes more than $67,000,000,000 in local assistance funding for FY 26‑27," Ramsey said in opening remarks, and she described steps to avoid disrupting children currently enrolled.
Ramsey and Deputy Director Jaime Milam said the administration used data on contractor relinquishments and unspent awards to justify reallocating some reductions between CCTR (center‑based) slots and CAP voucher funding. Milam said relinquishments are a common part of contracting when agencies cannot ramp immediately: "Sometimes this happens in a one‑time basis," she said, and CDSS typically redirects relinquished funds within the same county to avoid disenrollment.
But lawmakers pushed back. One committee member said the May Revision scores the same dollar savings whether the reduction is taken from CCTR or CAP, yet removing slots from CAP affects more families because CAP slots cost less per slot. "If we're scoring the exact same amount of money, why remove more slots?" the member asked.
The Legislative Analyst's Office echoed that point. Dylan of the LAO said shifting reductions into CAP "presents some trade‑offs" because CAP generally reaches families faster but, because its cost per slot is lower, a given dollar reduction eliminates more funded slots. The LAO recommended the legislature ask the administration for additional justification for applying reductions to CAP and to consider applying any rate increases consistently across all programs.
Officials also defended a proposal to reclassify $70 million in out‑of‑contract administrative support as an increased administrative percentage (a 1.5 percentage‑point raise in the AP administrative rate). That change, CDSS said, would create clearer reporting and long‑term stability for contractors. "Bringing them into the admin and increasing the admin by the 1.5% then it become[s] a permanent ... in their admin," CDSS testified. Lawmakers warned a percentage‑based approach could grow future general‑fund obligations if slot counts or rates rise.
The May Revision also proposes reversing earlier one‑time costs for implementing a prospective‑pay requirement that the federal government has rescinded. CDSS cited a May 12, 2026, CCDF final rule that returns the option to states to pay providers prospectively or by timely reimbursement; as a result, the administration proposes reverting the previously budgeted one‑time implementation funding.
Providers and advocates told the committee the proposed shifts would not match the on‑the‑ground need. Donna Snaringer of the Child Care Resource Center in Los Angeles said her program "has not enrolled a family since March 2025" and carries about 35,000 children on its waiting list; she urged the legislature to prioritize using unspent funds to preserve existing slots rather than making permanent reductions.
Numerous public commenters, including family child care providers and coalition representatives, urged lawmakers to reject cuts to general child care (CCTR) and AP funding, to adopt a higher COLA that more closely tracks the K‑12 increase, and to restore funding for promised expansion slots.
Committee members held the items open for further review and asked CDSS and the Department of Finance to supply more granular analyses on slot impacts, the projected trajectory of relinquishments and alternative structures for funding administrative support.
The subcommittee paused the item after an extended Q&A and moved to a recess before the hearing's health portion.
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