Perhaps the greatest unmet need identified by the operators of early child care centers is not for qualified teachers — although they definitely need more of them — it’s the need to open more space to care for the 4-year-old children of working parents.
The unfolding debate about whether the state of Wisconsin should make early child care a public good and invest more public dollars in it — Democrats are on board, Republicans must still be convinced — has revealed several possibilities for expanding early child care. Among those possibilities is the interest of child care centers in serving more 4-year-olds along with their younger peers.
As Donna Jost, early learning campus manager for Madison College explained, all but two public school districts in Wisconsin offer 4-year-old kindergarten and almost all of them are part-day programs. If they had more state funding, child care centers could fill the part-day breach in a more affordable way for working parents.
For the public schools, the state Department of Public Instruction (DPI) allows three different models: 1) In-house, meaning within the school district, school district staff, school district space; 2) Purely community-based, which means a school district pays a child care center to hire their own teachers and provide care within that child care location; and 3) A seldom-used option where a school district hires the teacher and sends the teacher to the child care setting to provide 4K services.
Whatever the arrangement, 4K is considered public education and is free for families — free and enticing given the growing cost of child care. In his State of the State address earlier this year, Gov. Tony Evers said the state must do more to lower the out-of-pocket costs working families pay 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%.
Given those daunting figures, Jost said the choice is a no-brainer for working parents. “With child care so terribly expensive for an individual family budget, and if you have the option of a free choice for your 4-year-old, of course you’re going to take that,” she said.
Yet for so many child care center budgets, Jost said 4-year-olds are “sort of this sweet spot” because the teacher-child ratios have decreased, and therefore the cost of care has decreased. This helps offset the cost of providing care to younger children. “That’s part of the reason that so many centers do not offer infant/toddler care — because centers typically lose money on infant/toddler care.”
Madison College has had a 4K program since MMSD established its half-day program during the 2011-2012 school year, and now, with Madison piloting a full-day 4K program, Madison College has contracted with MMSD on that as well. MMSD can pay teachers as district employees more than what the community sites can afford.
“The educational requirements are the same, so as a community provider, I have to have a DPI-licensed teacher to fulfill the terms of that contract,” Jost said. “So, my teacher and a district teacher have the same educational qualifications, and yet I cannot pay them at the same rate as the Madison district can, and that’s true for school districts and child care centers around the state. They’re doing the exact same work, and there is a huge pay discrepancy.”
According to Jost, in communities where the school districts have 4K, so many of the 4 year olds are going to the public schools that local child care centers cannot afford to remain open due to the loss of revenue.
If the school district does offer the option to contract with a community center for 4K, children can still receive their free public education and the district is then paying a contractual per pupil fee to the center. However, if this contractual fee does not cover the full cost of care, many centers are in a Catch-22: either lose almost all of their 4-year-olds to the free public school, or contract for 4K to keep those 4-year-olds, but still at a loss.
Red Caboose Child Care Center has applied for and received a contract for 4K with the Madison Metropolitan School District (MMSD), but keeping teachers in this position for an extended period of time can be challenging — mostly due to rate of pay, according to Lisa Fiala, executive director of Red Caboose. For someone to work as the 4K teacher under the MMSD contract, they need to have a DPI license. This licensure comes with a level of education that many early childhood education teachers may not have.
Fiala said the difference could be several dollars per hour, which can be a difference-maker even though Red Caboose offers a competitive benefits package that can represent a $20,000 add on to a teacher’s salary. “We are competing with the school district and other centers for rate of pay,” Fiala said. “This is partially due to how our salaries are structured under our bargaining agreement.”
How to fund
With early child care becoming more expensive and inaccessible for parents, the question of additional funding hangs over Wisconsin’s biennial budget wrangling. Evers has proposed spending $480 million over the next two years on Child Care Counts, the state’s payment stabilization program that helps child care providers and families, to pay early childhood educators a more competitive wage, attract more educators to the profession, and to fill an estimated 33,000 open seats in child care centers.
Republicans have vowed to rewrite the $119 billion budget proposal submitted in late February by Gov. Evers. Although states and even some localities have established dedicated funding sources for early child care — examples include a payroll tax in the state of Vermont and a tax on high net-worth individuals in Washington, D.C. — Wisconsin’s historically large $4.5 billion budget surplus could enable the state to use general fund revenues.
Were it adopted as part of the 2025-27 biennial budget, Gov. Evers’ proposed $480 million allocation for Child Care Counts would be augmented by an expanded child and dependent care tax credit that goes into effect this year. More than 110,000 Wisconsin taxpayers could see an average benefit of over $650 per filer, totaling nearly $73 million in 2025 alone.
While this credit applies to working parents, others have argued for employer tax credits. Kurt Bauer, president and CEO of Wisconsin Manufacturers and Commerce, the statewide chamber of commerce, said the governor’s child care proposal is largely more subsidies, which has not lowered costs. “The smarter approach,” he said, “would be to create refundable tax credits for employers to provide financial assistance to help pay for child care for their employees.”
