Should early child care be considered a public good and therefore worthy of more public investment from the state government?
With child care becoming more expensive and inaccessible, the question hangs over Wisconsin’s biennial budget wrangling. Gov. Tony Evers has proposed spending $500 million over the next two years on the state’s Child Care Counts program to pay early childhood educators a more competitive wage and attract more educators to the profession, and to fill an estimated 33,000 open seats in child care centers.
“Early childhood is the smartest investment that we can make as lawmakers, and we have to start addressing the high cost and unavailability of child care for families,” said state Sen. Kelda Roys, D–Madison, who represents the 26th Senate District and serves on the Joint Finance Committee, which reviews the state’s revenue and appropriations. “This is an issue that affects every family with young kids. It affects every employer in the state and it affects our economy as a whole, but most importantly it affects kids and their trajectory in life.
“We know that 90% of brain development happens in the first five years, and yet we invest the least amount of money at that point in a kid’s life.”
Roys said child care was one of the top issues lawmakers heard about in listening sessions prior to passage of the 2023–25 state budget, and said it has only gotten worse after Republicans allocated nothing for Child Care Counts in the current budget. Although Evers followed up with $170 million from the federal government, the money will run out by summer and new funding must be provided in the next budget.
Assembly Speaker Robin Vos, R–Rochester, has made clear he prefers to return more of the state’s $4.3 billion budget surplus to taxpayers. After several emails and phone calls, IB was unable to reach Vos for comment about whether Republicans would support state funding in the 2025–27 budget.
For child care providers, the research-backed, developmental importance of a child’s first five years of life is reason enough to make early child care a public good — a service supported by the government and available to all. Operationally, they cite the importance of having more state support so they can better compensate teachers and provide tuition assistance to parents. Advocates say such funding would help Wisconsin employers find the labor they need, too — because without affordable child care options, many working parents can’t enter the workforce.
Businesses and chambers of commerce are coming around to this issue because they know it’s hitting their bottom line, said Ruth Schmidt, executive director of the Wisconsin Early Childhood Association. While tax credits and employee benefits are helpful, she said they are no substitute for a broad, sustained public investment in child care.
“What we need is to get businesses and chambers behind using their leverage and their influence to call for an actual investment of state revenue into this [Child Care Counts] program, or into a program that puts money toward child care,” Schmidt said.
A patchwork of support
Child care providers rely on a number of programs to help support business operations, teacher salaries, and reduce the cost of care to families. In addition to Child Care Counts, an individual center might have its own tuition assistance program. Support is available from Wisconsin Shares, a child care subsidy program for eligible working families; Young Star, a quality rating system run by the state Department of Children and Families (DCF) that enables 5-star rated centers to provide extra tuition assistance to families that qualify for Wisconsin Shares; and the city of Madison’s tuition reimbursement program.
The Child Care Counts program, a stabilization fund established during the pandemic to help child care providers and families, was set to end in January 2024 until Evers directed $170 million in federal funding to continue it. The governor’s action means DCF has about $10 million available monthly for Child Care Counts through June 2025, when the current budget biennium ends.
For Donna Jost, early learning campus manager for Madison College, a fully funded Child Care Counts program would be a boon for the student-parents, teachers, and community residents who place their children at early learning centers at its Truax campus. About 70% of its population are the children of students, another 25% are the children of staff and faculty, and 5% are the children of community members.
Until the funding ends in June, the college is using its Child Care Counts dollars for tuition assistance for student-parents who are not eligible for its other scholarships, and for college staff, particularly teachers, to help offset the cost of child care.
“We also use some of the funding to pay for professional development opportunities for our teachers,” Jost said, “and so we’re worried about where the money will come from if Child Care Counts disappears.”
Heather Reekie, owner of the Madison franchise of Casa de Corazón, a Spanish immersion early learning program, and her business partner Casey Thompson, are in the early stages of growing their business on Odana Court. Opened in November 2023, the center is part of a company founded by CEO and Madison native Natalie Standridge.
As a Spanish immersion program, the curriculum is designed to expand the brain capacity of young children “when their brains are well equipped to take in a second or, potentially for some of our kids, a third language,” Reekie said. “They have this capacity to learn vocabulary and correct pronunciation when they’re so young, and so these kids are learning to count, recognize letters, and spell at very young ages.”
While Casa is too new to have received help from Child Care Counts, an allocation from that program would help with staff compensation, professional development, and support for families. “We’ve got a number of families on Wisconsin Shares now, but it doesn’t pay for all of their tuition,” Thompson said. With additional funding, “we could supplement the portion they need to pay.”
Other Casa tuition assistance comes from a University of Wisconsin–Madison student discount, a mentorship stipend from the Wisconsin Latino Chamber of Commerce, and once Madison accreditation is granted (which takes several years), families will be eligible for tuition assistance from the city.
Red Caboose Child Care Center moved into its new building on Winnebago Street in 2023 after outgrowing its facility on Williamson Street. It has 11 classrooms but four are unused. If all 11 classrooms were full, it could serve a total of 153 kids per day, which is not the case because of a staffing shortage.
Executive director Lisa Fiala and her fundraising team constantly apply for grants, either for the building, scholarships/tuition assistance, or for programs. At the moment, Red Caboose has a waiting list of 424 children, including nearly 60 who haven’t been born yet.
Fiala said when the program received $22,000 per month in state funding during and immediately after the pandemic, it was dedicated to its classrooms, teacher compensation and for general program operations. Losing that support would worsen an already challenging environment for child care centers and the families that rely on them, she said. “We receive panicked calls from parents and potential staff who are finding out that their centers are closing,” Fiala said. “We need the state and federal funding to stay open so that our businesses can do what they need to do to make our economy work. That’s why this is important.
“It has become much more complicated to run our business completely on our own. Our employees need a livable wage, and in many situations families are paying more than what their mortgage or rent is for tuition.”
Cost of care for families
In his State of the State address, Evers said the state must do more to lower the out-of-pocket costs working families are paying for child care. He cited a 2023 report that showed child care costs in Wisconsin can consume 18 to 36% of a family’s household income. If those parents are under 25 and have two kids in child care, it’s closer to 70%.
“The cost of putting two young kids in child care costs more than the average rent or mortgage in Wisconsin and exceeds the annual cost of tuition to send two students to the University of Wisconsin–Madison,” Evers said. “And even if folks can find and afford care, families may be waitlisted for months. Child care providers across Wisconsin surveyed last fall had 48,000 kids on waitlists, with nearly 60% of providers having unutilized capacity, often because they needed more workers.”
Like other child care providers, Madison College is constantly on the hunt for grant dollars to help eligible parents defray their costs, and parents use programs like Wisconsin Shares and scholarships offered by the college.
Red Caboose relies on Wisconsin Shares, Young Star, Child Care Counts, the city of Madison’s tuition assistance program, and its own tuition assistance program — the center provides an average of $40,000 per year in tuition assistance — to support families with tuition costs. More than 38% of its students are children of color, 25% come from low-income families, and 80% of families qualify for and receive tuition support. It has a sliding scale of weekly rates, with a child’s age and family size and monthly income also factored into the rate each family pays.
“Having that conversation with families is like, ‘If you live within the city of Madison and you don’t qualify for Wisconsin Shares, you can apply for the city of Madison tuition assistance program because we’re accredited,” Fiala said. “What I’m finding out with that is that a majority of our lower income families cannot afford to live in Madison.
“Many of our families who may not qualify for Wisconsin Shares live outside of the city, which disqualifies them for the city’s subsidy. They do qualify for a discount on our sliding scale, but it still may not be affordable. We are trying to figure out ways to provide stronger financial support for the middle and lower middle class families.”
Staffing challenges
Since Madison College educates future teachers, one might assume it has less difficulty hiring them. Yet it’s currently down 2-1/2 full- time positions, which means Jost has two classrooms that are not fully opened. The total waitlist for care is about 115.
An expansion will add 34 slots at an existing center on the Truax campus, 20 of which are not yet open due to staff shortages. At its Goodman South campus, where renovations began in February in anticipation of a January 2026 opening of a new facility, there will be seven classrooms. While it will be licensed for 84 children, it will serve up to 100 children because it will offer night care. Minus night care, the combined capacity of both locations is 170.
Madison College students pitch in as interns and in paid teacher assistant roles under a partnership with the college’s Early Childhood Education program. In December, two recent graduates, both former interns, were hired to join the staff.
At Red Caboose, “the biggest hold up that I have to enrolling more children right now is hiring teachers,” Fiala said.
Funding during the pandemic helped. “Some of it went to salaries to help provide a higher, more competitive wage for our teaching staff who have historically been underpaid. Yet, we’re trying not to rely on subsidies unless we know it is from a steady source,” Fiala said. “We’re a union organization, and it is not in our plan to reduce salaries.”
The for-profit Learning Gardens Child Development Center, located in University Research Park, serves families with infants as young as six weeks old and children up to age 10. Tuition assistance is provided through Wisconsin Shares, Young Star, and the city’s program, and a larger child care allocation from the state — it now receives about half from Child Care Counts than it previously did — would be used for a combination of things, mostly on the staff side.
Mike Ring, vice president-building services for Park Towne Development Corp., the owners of The Learning Gardens, said the center has made a substantial increase in staff pay and some benefit increases. Whereas its starting pay is now $18–$22 per hour based on education and experience, prior to COVID it was in the $15–$18 range.
“We’ve made a pretty large jump in pay and some benefits, and we’ve been using the Child Care Counts grants to help fund that,” Ring said.
But Ring said it’s more difficult to find staff now. Some applicants don’t have much experience other than nannying or babysitting. With state-approved training, they can become certified without obtaining a two-year or four-year degree, Ring said. “The problem is that while most who come in that way do a good job, others don’t realize the level of work that it involves and they don’t last very long.”
The effect on businesses
The struggle to find child care not only affects families and child care centers, but it also contributes to the labor shortage faced by the broader business community. According to a 2020 U.S. Chamber of Commerce Foundation study, 58% of working parents left the labor force because they were unable to find suitable child care. In addition, 32% of women cited the need to be home to care for family members as a barrier to returning to work.
While women still carry most of the burden, the share of fathers leaving work to care for home and family increased from just 4% in 1989 to 23% in 2021.
In 2023, 2.2 million parents with children under age 6 reported needing to make job changes due to problems with child care, which included quitting a job, not taking a job, or significantly changing their job due to child care challenges, according to a report titled “A 2024 Review of Child Care and Early Learning in the United States” by the Center for American Progress.
Local chambers also cite the child care barrier as a factor in the labor shortage. In 2023, noting that most of Madison’s recent population increases are people of child-rearing age, Zach Brandon, president of the Greater Madison Chamber of Commerce, called for a public-private partnership to address the situation. This includes the use of loan-loss reserve funds, where the private sector creates reserve funds that allow banks to make investments in child care facilities.
Kate Miller, president and CEO of the Middleton Chamber of Commerce, said jaws dropped when Schmidt, from the Wisconsin Early Childhood Association, recently spoke to member businesses about rising child care costs, the shortage of teachers, and other aspects of the crisis that prevent parents of young children from fully participating in the labor force.
Miller said nearly all of her members (98%) have told her that finding quality workers is an issue that keeps them up at night. As the Middleton chamber tried to understand why employers are having workforce issues — beyond the most cited one, an aging population — it found a number of other factors, including early child care.
“This is one component of the workforce challenge that they were concerned about, and it’s the most overlooked component of what’s going on,” Miller said.
A public good
Early child care advocates say it’s long past time for this type of care to be considered a public good. Those who would like to see permanent public funding to support development of children from birth to age 5 believe it would be a natural extension of K–12 education.
“Early childhood education and child care is a public good in most developing countries, and what I think our series of studies around the Child Care Counts program shows is that there’s demand for child care in this state that’s not being met,” said Hilary Shager, associate director of programs and management at the UW–Madison’s Institute for Research on Poverty (IRP).
Several of the statistics Evers cited in his State of the State speech were taken from the IRP’s September 2024 study, “Child Care Supply and Demand Challenges in Wisconsin.”
“If we just rely on the cost of tuition and keep passing that on to parents and caregivers, that’s not a viable and sustainable way of doing things. If we just say that child care providers need to find a way to provide care, that’s not working, either,” Shager said. “A lot of these providers are constantly working on the margin, and it’s a really small margin.”
Elliot Haspel, a senior fellow at the family policy think tank Capita and the author of two books about the child care crisis, said the U.S. has for decades treated early child care like a private market good rather than a public good. He is among those who believe the economics of child care as a private good have never worked because it’s a labor-intensive service.
“The labor costs are really high, fixed costs, and the only way that we handle those sorts of situations is by putting in lots of public money because otherwise you have to charge parents a ton,” Haspel said. “Even when you’re charging them $10,000 a year, it’s actually less than needed to be able to run a good, sustainable program and pay your staff well… that’s always been the problem.”
States like Vermont, New Mexico and Washington state have found some success by committing state money to child care. Vermont has seen an impressive rise in new child care programs and has created 1,000 new slots using a payroll tax, while New Mexico uses some of its natural resources fund, and Washington state uses a capital gains tax. “There are different ways of doing it but all of these places have identified a robust, recurring funding stream,” Haspel said.
In Wisconsin, the initial funding source for Child Care Counts likely would be general fund revenues. Were it adopted as part of the 2025-27 biennial budget, Evers’ proposed $500 million allocation would be augmented by an expanded child and dependent care tax credit that goes into effect this year.
Like tax credits, employee benefits can help around the margins. Employers such as Promega Corp. provide on-site child care for employees. Some offer flexible spending accounts for child care or direct cash awards, but they typically cover only a fraction of the cost.
What’s next?
Evers’ proposed spending increase for Child Care Counts will be among the items up for debate as the governor and legislative leaders hammer out a new state budget by July 1. Child care executives and working parents will be watching to see if lawmakers are willing to go beyond tax credits. Said Red Caboose’s Fiala, “The two ends of our society, our little ones and our elders, are so undervalued and under-resourced for the types of care that they need and deserve.”
