Impasse is called a threat to children

The state budget impasse that has lingered for more than a month is holding up $1 billion in payments to California’s 785 state-funded child-care agencies, putting at risk 500,000 low-income children who could lose services, state Supt. of Public Instruction Jack O’Connell said Tuesday.

O’Connell said thousands of licensed child-care programs served by the agencies are on the brink of closing, with many issuing IOUs to employees or taking out costly lines of credit that could mean future reductions in services. The ripple effect if programs cannot weather the budget delay could be devastating, he said, putting in jeopardy the jobs of parents who depend on child care as well as the state’s 24,000 child-care workers.

“Many of the most vulnerable and helpless Californians are in fear of losing important services,” O’Connell said during a news conference at the Emerson Children’s Center in Burbank. “The programs provide developmentally appropriate instruction for students from the day they’re born to 12 years old. The programs also provide meals, and for many children they are the most nutritious they will receive all day.”

O’Connell accused Senate Republicans of refusing to agree to a balanced budget in a fit of gamesmanship over spending cuts that could have severe consequences for children and their families. Child-care providers are not the only ones at risk. The state Franchise Tax Board said Tuesday it was holding up 202,000 claims totaling more than $63 million in rental assistance to elderly, blind and disabled Californians pending passage of a budget.

But Senate minority leader Dick Ackerman (R-Irvine) countered that it was Democrats who refused to bring up an emergency spending measure introduced by Republicans last week that might have allowed funds to flow to critical state services, including child-care agencies.

“Our main goal is to get a balanced budget because we know next year’s budget could be much worse than this year,” Ackerman said. “It is the Democrats who are holding up funding, but we will continue to meet to get a resolution.”

Democrats disagree. They say they have already made major spending concessions in a budget proposal that enjoyed bipartisan support in the Assembly. The Senate needs one more GOP vote to approve a spending plan by the required two-thirds majority.

Most child-care providers were due to be paid in July for contracts that would carry them through the first quarter to pay rent, staff wages and other operating costs. Some agencies have small reserves to tide them over or a line of credit.

Many providers, however, face the stark choice of continuing to care for low-income children who get state subsidies and receiving retroactive payments when the budget is signed, or dropping those families for private, fee-paying clients.

In Los Angeles County alone, about 78,000 children could lose services, said Donita Stromgren, policy and member services director for the California Child Care Resource & Referral Network.

“What’s most challenging is that we don’t know what to do next,” Stromgren said. “Where do we get the money to keep programs operating and how do we tell the Legislature, hey, this is real? We’re feeling a bit helpless.”

Stromgren said that during a similar budget impasse in 2003, several programs closed for good because they could never recoup their losses.

Stacy Miller, vice president of external affairs for the Child Care Resource Center in Chatsworth, said this is the scariest budget impasse she has experienced because there appears to be no end in sight. The agency dispenses state funds to more than 2,000 providers serving 25,000 children and families in the San Fernando, Santa Clarita and San Gabriel valleys.

The center has been forced to use a line of credit of up to $8 million so providers can continue operating. But that credit line will be expended by mid-September and about 4,500 children could lose services, Miller said. In the meantime, the agency is paying $18,000 in monthly interest that would otherwise be used for services.

“It’s a systemic problem that ties the livelihoods of individuals to the ability of legislators to come to agreement on a budget,” Miller said. “We have to look at this in totality: What does it mean to children and families and what can we do so that they are not victims of this in the future?”

Rasiene Reece-Carter, a child-care provider who works from her home in Lake Los Angeles, said it is increasingly hard to run a business in a system that seems inherently unstable.

Reece-Carter cares for 12 children, most of whom receive subsidies. Her income can swing from $60,000 to $70,000 in one year to $20,000 the next, she said. She and other providers said they were most frustrated because they had little say on policy issues.

That may change, though, under a bill sponsored by Assemblyman Kevin DeLeon (D-Los Angeles) that would exempt family child-care providers from state antitrust laws and allow them to organize to negotiate wages, benefits and other job terms. The bill has passed the Assembly and is being considered by a Senate committee

carla.rivera@latimes.com