Sources of Revenue:

General Fund

Legislation creates:

A New Program

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

The proposed legislation requires the Secretary of the Department of Health and Human Resources to promulgate a legislative rule and establish a plan for the phased implementation of the child care program quality rating and improvement system. It allows for a 2 year pilot project in up to 5 counties and requires a statewide program beginning July 1, 2011; allowing gradual implementation if insufficient funds are available. The bill requires creation of a quality rating and improvement system advisory council facilitated by the Secretary. It requires additional staff, a public awareness campaign, an internet-based management information system and financial assistance to child care programs and their staff that achieve higher levels of quality and education. The estimated fiscal impact to the Department of Health and Human Resources (Department) is $11,909,693 the first year and $51,423,480 each year upon full implementation.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2009 Increase/Decrease (use"-")	2010 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	0	11,909,693	51,423,480
Personal Services	0	1,208,364	4,513,251
Current Expenses	0	3,056,628	31,755,107
Repairs and Alterations	0	0	0
Assets	0	0	0
Other	0	7,644,701	15,155,122
2. Estimated Total Revenues	0	0	0

Explanation of above estimates (including long-range effect):

The above estimated 2010 column represents a pilot in the 5 largest child care counties. The fiscal year upon full implementation column is an estimate of the cost of the program going statewide. The estimate for staffing costs, including the cost for computers and necessary software. It considers the cost of training for the Environmental Rating Scales including the transportation and registration. It includes increased wages and health care benefits for child care staff who achieve higher education levels, and scholarship money to help them obtain the education. It includes money to help child care programs reach higher levels of quality. In addition, it includes tiered reimbursement levels for these programs. It proposes to increase eligibility levels to 200% of the federal poverty level for subsidized families. The estimate includes money for information system development and maintenance, a public awareness campaign, and for a contract to study the effectiveness of the new system. There is not enough information in the bill to estimate any costs associated with the Advisory Council. It is unclear how many members, and how many meetings per year would be conducted and who would be responsible for these costs. Detailed information related to the above cost estimatesis has been provided to Neva Maynor and is available upon request.

Memorandum

The full implementation estimate is difficult due to the cumulative nature of some of the benefits included and no real benchmark of how many child care staff will attain higher education levels and how many child care settings will pursue higher levels of accreditation. The estimate is based on the current population of licensed child care providers and does not take into account any new types of programs that would be added to licensing requirements. This estimate does not take into account any staff turnover. This estimate only considers items mentioned in the proposed legislation and does not include additional items found in the PIECES report that are not shown in the bill. The estimate does not include costs associated with the Advisory Council, including travel costs, meeting room rental, etc. There is concern that the current information system used for the child care program (FACTS) could not, in it's current form, allow a change in rates and reimbursement to allow a pilot project in only a few WV counties. Modification to that system would have to be done before this could be accomplished. The cost to do that is not included here. There is concern about adding the subsidy levels of the 75th percentile of market rate and 200% of federal poverty level in state code. In the past these have been adjusted based on the current economic conditions. If they are put into state code, any adjustment will require a state code change and would not be easily adjusted when needed, based on the economy. In addition there is a statement in the bill that the rating or potential rating of a child care provider may not be individually disclosed. This would defeat the purpose of the quality rating system.

Person submitting Fiscal Note: Martha Yeager Walker
Email Address: dhhrbudgetoffice@wv.gov