All Roll Calls
Yes: 127 • No: 18
CaliforniaSB 1202025-2026 Regular SessionSenateWALLET
Budget Act of 2025.
Sponsored By: Sponsor information unavailable
Signed by Governor
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Bill Overview
Analyzed Economic Effects
17 provisions identified: 6 benefits, 3 costs, 8 mixed.
Monthly add-ons and $3,000 for centers
The state pays centers a monthly "cost‑of‑care‑plus" add‑on for each subsidized child from January 1, 2024 through June 30, 2026. Monthly amounts are $140 (central), $141 (northern), $160 (southern), $171 (Los Angeles), and $211 (bay area). Centers that provided subsidized care in April 2023 also get a one‑time $3,000 payment in 2023–24. Distribution agencies get 10% to process monthly payments and 5% for one‑time payments; after June 30, 2025 the 10% applies only to specified monthly amounts. The education and social services departments must fund and share data to issue payments, and the state can bypass some contracting rules to speed distribution.
Provider rate floors and ceilings
From January 1, 2022, contractors who had the standard rate on December 31, 2021 are paid at least the higher of two amounts. The state pays the 2018 regional market rate 75th percentile or the contractor’s December 31, 2021 per‑child rate grown by the applicable COLA. Also since January 1, 2022, each region’s ceiling is set to the higher of the 2018 75th percentile or that region’s December 31, 2021 ceiling.
Move to a single statewide rate
The state is building a new, single childcare rate based on a cost‑of‑care method. Data work begins by July 1, 2023, and required federal plan materials are sent by July 1, 2024. By July 1, 2025, rates are set using the new method, and they cannot drop below June 30, 2024 levels. If delayed, temporary rates must be at least current statutory amounts; if federal approval fails, the state must run a new market rate survey. The state reports quarterly on progress through July 1, 2027, sets fair standards that vary by program year and hours, and reports each year on infant and toddler funding by county.
No COLA for child care 2023–26
The cost‑of‑living adjustment (COLA) for child care and preschool is set to 0% in 2023–24, 2024–25, and 2025–26. COLAs resume on July 1, 2026 under the law.
Preschool rates and 2026 payment cap
Starting July 1, 2021, state preschool rates are set at $12,968 for full‑day and $5,621 for part‑day. The law also sets a standard reimbursement rate of $12,888 starting July 1, 2021, with later COLAs. For 2022–23, funded programs are paid the lesser of 100% of the contract maximum or net reimbursable costs, even if closed by COVID orders. Beginning July 1, 2026, payments are capped at the smallest of three amounts: the contract maximum, net reimbursable costs, or adjusted child‑days times the contract rate.
More predictable pay for childcare providers
From January 1, 2023 to June 30, 2026, family child care home networks are paid for the maximum certified hours, not attendance. From July 1, 2025 to June 30, 2026, alternative payment providers are paid for each family’s maximum authorized hours, even with variable schedules. Family child care home networks get 100% of need at maximum hours in 2025–26, minus allowed admin withholds. Programs accept a monthly attendance record or invoice. Contractors do not track provider absences for reimbursement.
Temporary higher rates when funds allow
Starting July 1, 2022, the department may raise provider payments temporarily when funding is available. It can pay above regional ceilings or statutory rates and give one‑time lump‑sum payments. The department may hire other entities to distribute this funding.
2025–26 funds for childcare reimbursements
For 2025–26, the state provides $88.55 million for childcare reimbursements. The money pays providers based on families’ certified need in alternative payment programs. Funds are available to use through June 30, 2026.
Payment caps for some childcare providers
License‑exempt providers are paid no more than 70% of the region’s family child care home rate. Any provider’s reimbursement cannot be higher than the fee they charge private clients for the same service.
24-month eligibility and recertification rules
Once a family is approved, services last at least 24 months without reporting changes. If the 24 months would end before the program year ends, services continue to the end of that year. Families must report income increases that go over the ongoing eligibility threshold in Section 10271.5 and be recertified. If a new child is added, eligibility is extended so that child gets at least 12 months. The department issued bulletins by December 1, 2023 and starts formal rules by December 31, 2024.
Rules for families on covered care
You cannot get payments for care done by a parent, legal guardian, or a member of your assistance unit. Daily‑rate help is allowed only for an unscheduled need of 5+ hours in one event, or for needs of 5+ hours per day up to 14 days a month. One month of daily‑rate pay cannot be more than the provider’s full‑time monthly rate or the monthly ceiling. If your region has two or fewer needed providers, the county can pay above the usual regional ceiling. Payments during your 24‑month continuous eligibility are not treated as errors if your situation changes, unless there was fraud.
Rules for records, provider choice, fees
Families can choose licensed or license‑exempt providers and the paying agency must reimburse that choice. Providers paid through alternative payment programs must keep daily time‑in/time‑out records and get monthly parent and provider signatures; if a parent is unreachable for 7 days and attempts are documented, the claim may be submitted without the signature. For up to six months during system updates, a county may pay the recipient directly instead of the provider. Parent fees must cover reasonable and necessary extra services. Tribal providers exempt from state licensing must meet tribal standards, and the department may set rules on service hours.
How open programs are paid
From July 1, 2023 to June 30, 2025, an open program is paid the lesser of 100% of its contract maximum or its net reimbursable costs. From July 1, 2025 to June 30, 2026, an open program is paid the lesser of the contract’s maximum reimbursable amount or its net reimbursable costs.
Minimum wage required to get funds
Agencies that get public child care funds must pay every employee at least the minimum wage. Agencies that do not comply cannot receive these public payments.
One-time info to get ARPA grants
To receive ARPA Child Care Stabilization Grants, providers must submit one application or survey. It must include address and ZIP code, race and ethnicity, gender, open/closed status, prior federal relief uses, and any required federal certifications. The department sets the timing and format.
Admin rules for rate funds
Contracts to distribute temporary rate‑increase funds are exempt from normal state contracting rules and DGS review. Any rate increases must still follow federal rules for using funds and state eligibility rules.
COVID closures: distance learning required
If a funded state preschool closed due to COVID‑19, it had to offer distance learning under the Superintendent’s rules. The contractor also had to submit a distance learning plan while funded but closed. This rule applied through June 30, 2023.
Sponsors & Cosponsors
Sponsors
There is no primary sponsor on record.
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 6/27/2025
Item 1000 — Assembly AFLOOR
Yes: 69 • No: 1
Senate vote • 6/27/2025
Item 129 — Senate SFLOOR
Yes: 30 • No: 7
Senate vote • 3/20/2025
Item 54 — Senate SFLOOR
Yes: 28 • No: 10
Actions Timeline
Chaptered by Secretary of State. Chapter 13, Statutes of 2025.
6/27/2025SenateApproved by the Governor.
6/27/2025legislatureEnrolled and presented to the Governor at 3 p.m.
6/27/2025legislatureAssembly amendments concurred in. (Ayes 30. Noes 7. Page 1813.) Ordered to engrossing and enrolling.
6/27/2025SenateIn Senate. Concurrence in Assembly amendments pending.
6/27/2025SenateRead third time. Passed. (Ayes 69. Noes 1. Page 2320.) Ordered to the Senate.
6/27/2025HouseAssembly Rule 63 suspended. (Ayes 69. Noes 12. Page 320.)
6/27/2025HouseOrdered to third reading.
6/27/2025HouseWithdrawn from committee pursuant to Assembly Rule 96.
6/27/2025HouseFrom committee with author's amendments. Read second time and amended. Re-referred to Com. on BUDGET.
6/24/2025HouseReferred to Com. on BUDGET.
3/24/2025HouseIn Assembly. Read first time. Held at Desk.
3/20/2025HouseRead third time. Passed. (Ayes 28. Noes 10. Page 437.) Ordered to the Assembly.
3/20/2025SenateRead second time. Ordered to third reading.
3/18/2025SenateOrdered to second reading.
3/17/2025SenateWithdrawn from committee. (Ayes 27. Noes 10. Page 384.)
3/17/2025SenateReferred to Com. on B. & F. R.
2/5/2025SenateFrom printer. May be acted upon on or after February 23.
1/24/2025SenateIntroduced. Read first time. To Com. on RLS. for assignment. To print.
1/23/2025Senate
Bill Text
Chaptered
6/27/2025
Enrolled
6/27/2025
Amended Assembly
6/24/2025
Introduced
1/23/2025