Colorado Legislative Council Staff

STATE

FISCAL IMPACT

TITLE:            CONCERNING ESTABLISHMENT OF A VOLUNTARY CREDENTIALING SYSTEM FOR CHILD CARE PROFESSIONALS.

Summary of Legislation

            The bill establishes a voluntary, multi-tiered child care credentialing system in the Department of Human Services (DHS) for persons working in early childhood care and education programs. The new system does not affect the existing child care licensing program. includes the followingprovisions:In order to implement and administer the program, the bill:

establishes a voluntary, multi-tiered child care credentialing system in the Department of Human Services (DHS) for persons working in early childhood care and education programs (the system does not affect the existing child care licensing program)

            •   authorizes DHS to contract with an entity to administer the child care credentialing system and specifies that the entity shall collect fees received through operation of the system and apply said moneys to offset the costs of administering the system;

            •   authorizes DHS to apply for and receive gifts, grants, and donations for implementation of the system;

            •   prohibits the General Assembly from appropriating General Fund moneys for implementation or operation of the system;

            •   establishes a 15-member child care credentialing advisory committee charged with the following requirements:

                        —          to meet twice annually,

                        —          to recommend system implementation, the amount of credential fees charged, and training standards,

                        —          to report its implementation recommendations to the State Board of Human Services by January 1, 2000;

            •   instructs the State Board of Human Services to adopt rules to implement the system;

            •   directs DHS to report to the HEWI Committees of the General Assembly on or before December 1, 2003, concerning the child care credentialing system; and

            •   is repealsed the program, effective July 1, 2003.

State Revenues

NOTE:The bill requires DHS to implement a child care credentialing system and authorizes DHSto contract with an entity to administer the system, including the collection of new and renewal fees. Should DHS identify and select an entity to administer the system, all fees would be collected by that entity, and therefore exempt from TABOR and off budget. Because DHS is required to implement the system, should it be unable to contract with a private entity, it would be required to administer the system and collect the fees, making such fees subject to TABOR, and necessitating a cash funds appropriation.

            Proposed Section 26-6-305. This section requires the State Board of Human Services to adopt rules to implement the child care credentialing system. The rules are to include the amount of new and renewal credential fees; the amount of which is required to reflect the direct and indirect costs to DHS of issuing and renewing credentials. The The fiscal note assumes the system will become effective January 2000, with no applications and fees collected until that time (only 6 months of FY 1999-00).

            DHS indicates it will set the fee at a reasonable level to: (1) allow for a high level of participation; and (2) allow the program to be self-sustaining in future years. It is DHS estimatesd that the State Board will set fees at $15 per person. DHS indicates that the requirement to set a fee which reflects the direct and indirect costs of the program must be balanced against a fee level which would discourage or prevent the use of the credentialing system.

            Fees Collected. For FY 1999-00, it is DHS estimatesd that out that out of 20,000 eligible individuals, 500 persons will apply for child care credentials, or 2.5 percent. Fees to be collected are estimated at $7,500 ($15 x 500 = $7,500). For FY 2000-01, it is estimated that 1,000 persons will apply for child care credentials, or 5 percent. Fees to be collected are estimated at $15,000. Table 1 provides a summary of the fees to be collected by DHS or a private entity.

Fee Impact on Individuals, Families or Business

Pursuant to Section 2-2-322, C.R.S., which requires legislative service agency review of legislative measures which include the creation or increase of any fee collected by a state agency, the following analysis is provided.

State Expenditures

            The Department of Human Services will require $40,784 to implement the child care credentialing system in FY 1999-00, and $26,647 in FY 2000-01. DHS will incur costs in the following areas:

            •   Child Care Credentialing Advisory Board — Although the board members shall serve without compensation, they are entitled to reimbursement for reasonable travel expenses. These costs are estimated at $3,600 in FY 1999-00 (assumes three meetings prior to January 2000), and $2,400 in FY 2000-01 (assumes two meetings).

            •   State Department Staff or Contract Entity — DHS will require $37,184 to administer the system in FY 1999-00. The total cost includes $19,984 for personal services (0.5 FTE) and operating, $7,200 for computer programming to design and implement an automated tracking system(160 hours at $45/hour), and $10,000 for marketing (printing materials and distributing information to eligible applicants). Due to limited participation at the program's implementation, the fiscal note assumes 0.5 FTE is warranted. As the program expands and more individuals participate, increased FTE support for the program may be required; an issue which can be addressed through the budget process. Costs to administer the program are the same whether administered by DHS staff or a contract entity. The fiscal note assumes that DHS will be administering the system, thus requiring an 0.5 FTE authorization. Costs for FY 2000-01 are estimated at $24,247.

            Approximately $7,500 in fees will be collected in FY 1999-00 . Fees will be inadequate to support the program in its first years of implementation ($15 x 500 = $7,500). The $7,500 applied to the total cost of $40,784 leaves $33,284 in system costs requiring funding. DHS indicates that moneys it receives from the federal Child Care Development Fund may be used for the child care credentialing system.

Expenditures Not Included

            Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:

            •   health and life insurance costs — $1,118;

            •   short-term disability costs — $30;

            •   inflationary cost factors;

            •   leased space; and

            •   indirect costs.

State Appropriations

            As noted in the State Revenues section of this fiscal note, DHS is required to implement the child care credentialing system, but may contract with an entity to do so. The fiscal note assumes that DHS will administer a system until a contractor can be selected. Therefore, DHS should receive an appropriation of $40,784 and 0.5 FTE in FY 1999-00. Of the total amount, $33,284 is federal funds from the Child Care Development Fund, and $7,500 is cash funds from fees collected. The source of the cash fund is not identified in the bill.

Departments Contacted

            Human Services

Omissions and Technical or Mechanical Defects

            Because DHS is required to administer the system, it must collect fees. The bill does not create a cash fund for the purpose of fees collected.