Day-Care Closures Begin, Will Grow Without Budget

Lola Cornish’s carefully synchronized world shattered at 5:30 p.m. Friday. That is when Los Ninos, her 3-year-old daughter’s day-care center, shuttered its doors, a victim of the budget crisis that is holding up funding for hundreds of child-care programs throughout California.

“I’ve been spending every breath for the last two weeks telling anyone who will listen that we need to save this center,” said Cornish, 36, a Napa resident who has yet to find an affordable replacement.

The state halted payments of $380 million scheduled to be released last week -- including $212,000 for the privately run Los Ninos -- jeopardizing services for 429,000 children. The jobs of nearly 23,000 child-care workers could also be in danger, according to state officials and child-care industry specialists.

The payments were suspended because of a recent California Supreme Court ruling limiting the state’s ability to make them without a budget in place for this fiscal year, which began July 1.

Stanislaus County recently suspended care programs that serve 1,600 children because the state couldn’t guarantee payment of its nearly $10-million contract. At least 60 day-care workers there have lost jobs.

“We believe it would bankrupt us to run programs even one [more] month,” said Harold DeArmond, administrator of children and family services in the county’s Office of Education. “The state has been very evasive about answering any questions about whether our contracts will be fully reimbursed.”

DeArmond said there is little his office can do to help families. One couple told him they are using their vacation time to share child-care duties, he said.

Bob Nunez, assistant superintendent in the Riverside County Office of Education, said 100 staff members who work in the child development office were notified last week that they would be laid off or transferred to other departments if a budget is not signed by Aug. 18.

About 3,000 child-care providers were told they would not be paid after Friday of this week. The office would normally disburse $3 million in payments to providers each month, Nunez said.

Paul Miller, an official with the Child Development Policy Institute, an industry advocacy group in Fremont, said at least 61 child-care centers statewide have said they face closure if the budget is not signed in the next couple of weeks.

Miller, also executive director of a Bay Area center called Kidango, said his day-care center recently sold a piece of property for nearly $1 million to continue paying its 500 staff members.

As state officials compile a list of threatened agencies, they say they are also fielding dozens of calls daily from worried providers.

“We’re sympathetic and offering whatever help we can, but they’ve been good about understanding that it’s really out of our control,” said Michael Jett, director of child development for the state Department of Education.

The agency administers about $2.2 billion in annual federal and state money for preschool, after-school and full-day-care programs. The funds that were withheld are a quarterly payment that would normally be used by day-care centers for payroll, rent, maintenance and other expenses.

More than a third would have been in the form of vouchers used by parents to pay private providers.

Under the state controller’s interpretation of the Supreme Court decision, about $600 million is expected to be released beginning Aug. 1 to help parents in welfare-to-work programs pay for child care.

Administrators say that, like Cornish, other low-income parents face a grim summer if a budget is not passed soon.

Small centers, such as Los Ninos, which serves 108 low-income children, are affected first because they operate without the reserves that many larger centers have. Los Ninos has sought bank loans and emergency help from the Napa County Board of Supervisors, the Napa City Council and state legislators, without luck.

“We were praying that maybe even a private person would come forward with a no-interest loan,” said Los Ninos administrative assistant Artemisa Medina. But nothing came through.

Administrators of larger child-care centers said they are not receiving the funds they expected, either. They might be able to hang on for a few weeks more but are already cutting costs by conserving supplies, reducing staff training and even warning staff of possible layoffs.

Cliff Marcussen is executive director of Options, a West Covina agency that funnels state money to 3,000 private San Gabriel Valley day-care providers and operates its own facilities to serve a total of 9,000 children. Without a state budget, he said, “we’re looking at $3.5 million a month” that won’t arrive.

To meet a 60-day notice requirement, his agency will begin sending pink slips to more than 500 of its 680 employees by month’s end, Marcussen said.

The longer the budget impasse lasts in Sacramento, the more likely it is that parents will be forced to quit jobs to care for displaced youngsters, he said.

Dolly Valverde, 28, of Rosemead said she would likely have to leave her job as a receptionist to care for her 4-year-old, 5-year-old and 12-year-old sons if their day-care center, which receives funds through Options, were to close.

“It would be a dramatic change,” Valverde said. “I was on welfare, and I don’t want to have to go back to that.”

Officials also fear that many struggling day-care providers may not recover, even after lawmakers agree on a budget. Child-care employees, traditionally among the lowest-paid workers, may have found other work by then, forcing providers to recruit new staff in order to reopen.

“Most of us are going to apply for unemployment,” said Medina, referring to her 23 co-workers at Los Ninos. “But how long will we be on unemployment? How long will this last?”

Cornish works for a Napa referral agency, Community Resources for Children, helping other parents find child care. But on her modest salary, she said, she can’t afford to send her daughter to a center where fees normally run $500 to $600 monthly. She pays $100 a month at Los Ninos.

The only other subsidized full-day program in Napa County has 50 spaces, but the county has 700 eligible children on a waiting list, Cornish said.

“Your chances of getting a slot in another center is like your chance of winning the lottery,” she said.

Her daughter had been at Los Ninos for six months and was blossoming there, Cornish said.

“The learning environment was so wonderful, and she was even learning Spanish,” she said. “I try to explain to her what happened, but she doesn’t understand. She just knows that she’s not going to see her friends and teachers anymore.”

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Additional Agencies Soon Will Lose Funding

As California enters its fourth week without a budget, the impact of the state’s fiscal crisis is growing.

In the absence of a spending plan, up to $230 million in state payments to child development centers has been suspended.

Legislative aides are not being paid. Certain non-payroll expenses of the court system are being withheld.

Until a budget is passed by the Legislature and signed into law by the governor, the state Supreme Court has ruled that state Controller Steve Westly cannot spend money for any purpose unless there is specific legal authority to do so.

Although relatively few programs were affected by the budget deadlock in the first part of July, the state normally pays the vast majority of its expenses at the end of each month. “That’s the big drain time,” said Greg Larson, the controller’s chief of staff.

So the impact of the budget deadlock will increase with each passing day.

If there is no budget by early next week:

* Community colleges cannot receive $209 million in state aid.

* School districts would not get about $200 million for special education programs.

* Cities and counties cannot collect $103 million in state gas tax money for local streets and roads.

* Vendors who provide goods and services for everything from state prisons to colleges and universities may go unpaid.

* Most state workers would receive their monthly paycheck.

But legislators, state officials and political appointees will not be paid as long as the budget stalemate continues.