Budget FY2010 Update and FY2011 Budget Board of Early Education and Care November 10, 2009

1. BudgetFY2010 Update andFY2011 BudgetBoard of Early Education and CareNovember 10, 2009

2. Table of Contents • FY2010 “9C” Budget Reductions • Fiscal Year 2011 Maintenance Spending Plan; and FY2011 Caps – EEC Targeted Caps

3. FISCAL YEAR 2010 9C Reductions • On October 29th the Governor announced FY2010 budget reductions pursuant to GL29:9C; and • Overall, EEC was reduced by $16.4M, or a 3.12% cut.

4. Fiscal Year 2010 - 9C Reductions - Impact • Administration (3000-1000):  $322,492 this includes not hiring 2 critical staff positions (Director of Policy and Research or a Communication Director).  Furthermore, we also may need to eliminate up to two staff positions.  EEC is also capturing savings realized through agency cost reduction efforts. • Access Management (3000-2000):  $3,423,953 reduction access management services. This will require restructuring the management of vouchers. Each CCR&R will have their budget as of November 15th reduced by 55%. • Low Income Eligible Child Care (3000-4060):  $12,617,806 reduction captures a projected surplus in this account due to restrictions in access and normal attrition in the account, with fewer families able to maintain employment which makes them ineligible for child care financial assistance. • Quality Supports (3000-6000):  $48,000 eliminates scholarships for fees for individual providers to attain the CDA provided by the Department. • All other line-items are unaffected, including the Supportive and TANF Related Child Care, Head Start, UPK, Quality Supports, Mental Health and Family Support and Engagement.

5. FY2011 Maintenance and Cap Spending Plan Overview • FY11 Maintenance Budget and ANF Spending Target: • Though EEC submits a maintenance budget ($525M), ANF also requested that EEC submit a plan that is capped at an overall spending of $487.7M, which is a 7.17% reduction from FY11 maintenance; and • This represents and additional 4.36 percent reduction over the 9C cuts.

6. FY11 Budget – Maintenance and ANF Spending Target • ANF has limited EEC spending at $487.7M (is. To illustrate how the cut could be looked at, the above graph shows the 9C cuts taken out then the additional money necessary to be cut to meet the ANF target of $487.7M; • Restructuring of Family Engagement Grant: Transfers funding for the CPC-LPC portion of the CFCE Grant (From Quality Account) and CPC-LPC Supplemental Services (Income Eligible Account) into this account. This is an effort to build upon efficiencies gained in FY10 when EEC encouraged CPC-LPC to consolidate . • The $5M cut to the restructured Family engagement will result in a 30.3% reduction from maintenance.

7. FY11 Spending –FY2010 “9C” and Additional Cap Restrictions • ANF has limited EEC spending at $487.7M (for cap exercise).

8. FY11 Budget –Income Eligible Reduction • A preliminary look at of attrition in the Income Eligible account is indicating a projected $29M attrition rate over a 12 month period (data from October 2008 to June 2009); • This enabled the income eligible account to shoulder the “9C” burden and help EEC meet the ANF budget cap reductions of $21M; and • The following slides illustrates the projected attrition in IE account both in terms of population and in money.

11. Recommendation In order to meet the FY2011 Budget spending target, a reduction of 7.17% from FY2010 (pre 9c), EEC proposes to reduce the following line items: Administration, by $322,492 Access Management, by $3,423,953 Low Income Eligible Child Care, by $28,883,115 Quality Supports, by $48,300 Family Supports and Engagement, by $5M