After School Programs Are At Risk of Being Squeezed Out of Existence

Additional Funding Necessary to Keep Pace with Higher Minimum

Wage and Other Increased Costs

The Background.  The After School Education and Safety (ASES) Program, created by Proposition 49 in 2002, annually serves more than 800,000 unduplicated low-income students in over 4000 state-funded after school programs.

• 98% of these programs serve elementary and middle schools that have 40% or more of their students eligible for the free and reduced lunch program.
• At an ADA rate of $7.50, ASES provides a yearly maximum of $112,500 to serve an average of 83 elementary students daily and $150,000 to serve 111 middle school students.  ASES programs must provide a 33% in-kind/cash match.
• Programs must operate every day from dismissal until 6:00 pm, for not less than 15 hours per week (although most elementary programs operate closer to 20 hours weekly).
• Programs must maintain a supervision ratio of 20 students to 1 qualified staff member.
• Programs must employ a Site Coordinator who is approved by the school principal.
• Community-based organizations that contract with school districts constitute the majority of ASES programs.  School districts typically hold back up to 15% of the total grant for administrative purposes.
• ASES programs generally allocate more than 80% of their remaining grant funding to personnel costs, leaving very little room for other operating expenses.

The Problem.  ASES programs have operated on a shoestring since the beginning, under a rigid funding structure that limits their ability to be nimble in the face of imposed financial requirements.

• ASES budget has remained at $550 million General Fund since 2006, when Prop 49 was implemented.  
• The statutory ADA rate has not been raised since 2006, when it increased from $5 to $7.50.  The Wallace Foundation reports the average cost of an after school program is $7 per child per hour or $21 per day – nearly 3 times the rate paid to ASES providers.
• The minimum wage increased by $1 to $9 on July 1, 2014 and will increase another $1 to $10 on January 1, 2016.
• Some after school programs are being compelled by their school district to cover the newly increased STRS and PERS employer share for their ASES employees.
• Since the last ADA increase, the California CPI has increased more than 17%.

The minimum wage increases impact the hourly pay for both site coordinators and program leaders.

• While program leaders are typically paid more than the minimum wage, market pressures require providers to offer competitive part-time salaries.
• Site coordinators command higher wages in the current market commensurate with the minimum wage increase.   
• The fiscal impact of the combined minimum wage increase on an elementary level ASES program is nearly $15,000 per year, a 13% increase in a program’s expenses alone.

The minimum wage increase was never intended to lead to employee cuts and service reductions.  

• However, hundreds of career-track jobs held by entry-level employees in low-income neighborhoods are in jeopardy.
• Unlike private employers, ASES sites cannot realistically increase revenue from “customers” because ASES serves very low-income students and their parents.

Some view the Local Control Funding Formula (LCFF) as the mechanism to direct additional dollars to after school programs.  In reality, this holds little promise for ASES programs.

• The 3-year local control and accountability plans required under LCFF have recently been completed and adopted across the state.  The plans generally prioritize teacher new hires, teacher salaries, professional development and technology.
• Scant attention has been paid to “pupil engagement” strategies like after school programs.

The Impact.  Without an increase to the ASES budget, sites will be forced to sacrifice quality in order to keep the doors open for children to simply have a safe space after school.

• Many programs are at risk of becoming financially unviable and simply closing.
• Sadly, the retrenchment of after school programming would occur at the same time that unmet needs remain high: 27% of low-income elementary and middle schools do not provide after school; over 400,000 English learners attend a school that does not offer after school.

The loss of ASES programs translates into higher costs to the state because of the loss of quality services that enhance the lives of hundreds of thousands of low-income children and their families.

• Children who participate in an elementary after school program for 3 or more years are 20% less likely to drop out of school. (UCLA)
• Regular participation in an after school program is linked to significant gains in standardized test scores as well as reductions in grade repetition. (UC Irvine)
• English language learners who participate in after school programs are three times more likely to be reclassified as fluent in English. (Central Valley Afterschool Foundation)
• After school participants are 30% less likely to engage in criminal activities. (UCLA)
• Every dollar invested in after school programs saves taxpayers $3 overall and $2.50 in crime-related costs alone. (Rose Institute, UCLA)
• The required 33% match for ASES programs annually generates approximately $180 million in cash and services that the state doesn’t pay for.

The Solution.  The after school community proposes the following:

• The cost to after school programs of a single dollar minimum wage increase is $36 million.  To cover the cost of both minimum wage increases (excluding all other increased costs of doing business) the ASES budget should be increased by $72 million.  
• To ensure that ASES programs can more flexibly accommodate future increased costs, an annual cost of living adjustment should be adopted that is linked to the California CPI, beginning with FY 2017-18.

Let’s Keep “Education” and “Safety” in the

After School Education and Safety Act.