The California Budget Act of 2026 addresses a number of family child care priorities, including expanding subsidized voucher slots and updating policies like the 80/20 rule which previously prevented family child care educators from managing family emergencies or seeking medical care. It also closes corporate tax loopholes to generate tens of billions of dollars for public services.
We welcome the increase in voucher slots but a 2.01% increase to rates that only cover 30% of our current costs is insufficient to meet the moment.
Below is what we know about the Budget Act of 2026 and its impacts on family child care providers.
Provider Pay
2.009% increase on total subsidy payment received, both the Cost of Care Plus payment as well as the RMR rate for providers.
- Based on our calculations, the average increase would be around $24.38 per child, per month.
Expanded Spaces or Slots
What this means: more families can access affordable child care, and providers and others should see more families paid for by state subsidies seeking care. This is a down payment in the 1.7M families eligible but not yet funded for child care subsidies in California.
- Effective as of October 2026, adds 22,770 new spaces, or subsidized slots, for families. Of these, 20,700 are vouchers to be used where parents choose, and 2,070 slots will go to centers or FCCHENs.
- Maintains at least some of the 6,800 voucher spaces targeted for removal in the May Revision of the budget, maintaining more slots for families.
- Create new opportunities for the State to move unused slots to other agencies to ensure better subsidy utilization.
- Some of this funding can be used to add child care facility capacity, if needed.
Fire/disaster infrastructure money
$10.6M for licensed and license-exempt providers impacted by LA fires in 2025 and $25.7M for providers impacted by disasters in 2023 and 2024 as declared by the state or federal government.
- The funding can be used for facilities as well as materials and equipment.
Changes to licensing’s 80/20 rule (temporary provider absences)
Changes the requirement to permit provider absences up to 20% of a month, with qualified staff and provided other provisions are met.
- Gives CDSS authority to waive additional absences on an individual basis.
- Will require providers to give prior written notice to families of planned absences and and complete absence reporting to licensing the day after and a week after said absence.
New training requirements
- Adds initial, one-time preventative health training requirements for assistants and substitutes as a requirement of provider’s licensing, in addition to requiring assistants and substitutes to renew pediatric first aid and pediatric CPR every two years.
- Adds annual continuing education requirements of at least 12 hours on listed topics for all staff beginning Jan 1, 2027
- Removes the option to get a provisional license for providers who haven’t completed training requirements.
Family fee deductions
Families that still have a family fee will have that collected by agencies no later than Jan 1, 2027.
- Note: there are no changes to co-pays which providers collect if applicable.
Prospective pay for providers
There is no funding to implement prospective pay
Child absences
Unexcused absences of more than 30 days in a year would lead to loss of child care subsidy for a child.
Mandated reporter training
Required for providers regardless of language, even if training isn’t available in the provider’s primary language .
Site safety
Adds additional requirements for emergency and disaster planning for licensed providers, and requires training for all staff on the plan annually, starting Jan 1, 2027.
