State budget invests in child care, addresses consequences of wage increases

Over the past couple years, Krystal Johnson has been offered multiple raises and a promotion in her work in retail. But she's turned every one down.

The $.50 or $2 hourly wage increase would have come with a cost. She would earn too much to qualify for state-subsidized child care.

"I'm empowered to get a raise, but I can't even take it," said Johnson, 30, a mother of two who lives outside of San Jose. "It makes me feel like less of a person." 

The new state budget expected to be passed by state lawmakers Thursday aims to rectify this unintended consequence of wage increases.

Along with adding nearly 3,000 more full-day seats to state preschools, the spending plan includes $25 million to update the state’s outdated income eligibility requirements for subsidized child care and preschool.

The income guidelines haven’t been updated for a decade and have not shifted to reflect a rising cost of living and minimum wage increases.

"That just really hurts my heart they're using the income guidelines that [are] 10 years old when they raise gas prices and food prices almost daily," said Johnson.

Currently, if a family of three earns more than $42,216, they’re no longer eligible for subsidies.

The new spending deal pump $25 million toward updating the standards and raising the cap to about nearly $52,000.

At a press conference Tuesday, State Sen. Holly Mitchell, (D-Los Angeles) called the change an "acknowledgment of the work that we've done around minimum wage and not wanting to create a cliff effect where because you finally get to earn a livable wage you lose the critical supports that you need to be successful."

Minimum wage increases have also stressed some child care providers concerned about being able to pay workers. The budget provides increases in the reimbursement rates state preschools and child care centers receive for each child.

Erin Gabel, deputy director of external and governmental affairs at First 5 California, said this policy change was a top priority for early childhood education advocates.

"We were all unified together," Gabel said, "because stability for the children, stability for the parent, and stability for the provider are all achieved."

Once signed by the governor, the new spending plan will take effect July 1, 2017.

"Once July 1 passes and I see it all in paper, signed, I’m definitely going to ask for a raise," Johnson said. "I'm going to go ahead and advance my career because that's what I've been wanting to do."