The Child Care Counts program has ended, and Wisconsin won’t spend the $480 million Gov. Tony Evers initially proposed for early child care in the 2025-27 state budget, but that doesn’t mean early child care advocates can’t point to some wins in the spending plan.
In fact, Ruth Schmidt, executive director of the Wisconsin Early Childhood Association, counts three big wins in the new budget, which should come as good news for working parents and the companies that employ them.
Schmidt was pleased with progress toward the twin goals — identified in IB Madison’s March cover story titled “A Public Good?” — of stabilizing Wisconsin’s child care industry and lowering child care costs for working families with a permanent public investment.
“There are probably at least three items that come with significant dollars attached that I think are absolutely critical to this industry, and they are very representative of bipartisan leadership on getting a deal cut on these things to help stabilize the child care field,” Schmidt said.
The new budget, which the full Legislature will vote on Wednesday, would secure a total of $330 million for early child care, including direct payments to child care providers Evers identified as a fiscal priority.
Win #1
The budget contains $110 million in the first year of the biennium to ensure the continuation of direct payments to child care programs. Approaching June 30, when funding ran out for Child Care Counts, the pandemic-era program that provided direct payments for the first time, Schmidt said child care advocates were very concerned about the industry’s ability to offer competitive wages to teachers.
She said the continuation of direct payments from the state to child care programs is absolutely critical to pay for such labor expenses.
“That is what we have been advocating for — long and hard — across at least the last four to six years,” Schmidt said.
Win #2
In year two of the biennium, there is $66 million in general purpose revenue investment allocated to the Department of Children and Families to fund a School Readiness Program. It will allow child care programs that serve 4-year-old children to apply for state dollars.
Schmidt said the program is not about taking money away from 4-year-old kindergarten programs in the public schools, but it is “very much focused on a new opportunity for child care programs that serve 4 year olds to apply for this money.”
To qualify for a school readiness grant, child care centers must have a qualified teacher and a curriculum that meets the Wisconsin Department of Public Instruction’s model for early learning standards.
“Is it enough money? No, it’s not enough,” Schmidt said. “However, when you think about the fact that we have 34,000 4-year-olds in child care right now, this is probably enough money to serve maybe 10,000 4 year olds through this project.
“That’s a really solid start, and it corrects for something that when 4K started, we saw some pretty dramatic hits on child care because 4 year olds effectively were pulled out of child care programs and into the K-12 system,” she said. “And so, this is a way to say, ‘We’re giving you an opportunity to be part of this school preparedness education curriculum program.’ We think that’s a really important item.”
The school readiness money will not be available to child care centers if they’re partnering with the public school system to provide child care to 4 year olds, Schmidt said. If they decide to run their own separate program, they must notify their school district partner and meet the state’s criteria.
Win #3
More than $123 million is in the new budget to increase reimbursement rates under the Wisconsin Shares child care subsidy program to help lower out-of-pocket child care costs. The investment will raise rates for the Wisconsin Shares program to ensure the state meets its statutory obligation, meaning families can access 75% of child care slots within a given geographical area.
“Wisconsin Shares is where we received another major win for children of income-constrained families,” Schmidt said. “Wisconsin is currently reimbursing at 41% of the market. What’s in this budget will now make a commitment to getting us back to the 75th percentile, which means that these families will still be able to select care in quality child care programs.”
The budget will increase the reimbursement rate to providers caring for infants and toddlers across the state through Wisconsin Shares. Providers would receive payments of $200 per month for every infant under 18 months and $100 per month for every toddler between 18 months and 30 months.
Combined with a new state tax credit for child care that went into effect this year, and the possibility of a higher Child and Dependent Care Credit in the so-called “Big Beautiful Bill” now being debated in Congress, parents with children enrolled in early child care could see relief on several fronts.
In addition, the state budget contains $28.6 million for a pilot program to expand capacity across the state’s child care industry and $2 million to bolster Wisconsin’s child care resource and referral agencies, which help parents find child care locally and provide training and technical assistance to child care providers.
Possible pain point
While the $65 million allocation in year two is welcome, the second year of the biennium is a potential pain point for child care providers because the $110 million allocated in year one — which includes interest income from pandemic relief dollars, Schmidt said — is not replicated in year two. Schmidt said there is always a chance that a future Legislature can provide additional funding, especially now that general purpose revenue commitments have been made.
“I don’t know that I want to talk about it as a 12-month off ramp,” Schmidt said. “My hope is that by the time the next budget rolls around, we will be able to continue to call for investments and, depending on the makeup of the Legislature and who’s in the governor’s office, perhaps see some additional revenue for direct payments to child care programs.”
Child care operators are still analyzing the budget’s child care provisions, but the funding commitment means they will be able to maintain existing wages for their teachers, which are roughly $5-$8 higher than the pre-pandemic average of $13-$14 per hour statewide.
Lisa Fiala, executive director of Red Caboose Child Care Center in Madison, appreciates the new state investment, but said there is still work to be done to create a more sustainable model — one that includes more robust state funding. Red Caboose, which raised tuition by 8% just prior to passage of the state budget, has a starting wage of $18 an hour for teachers during their probationary period, and then wages rise based on education level and experience.
“What I want everybody to remember is that high quality care is expensive,” Fiala said. “If we’re going to take a look at providing an academic opportunity for children’s play-based learning, helping kids be ready for kindergarten, and having high-quality teachers in those classroom spaces who are educated and understand child development, that comes at a cost.
“And our families cannot be the only ones covering that cost for children because our children are going to be the ones taking care of us as we’re aging, so we need to take care of them now,” she said. “We can’t just be a luxury item on the backs of our families.”
Mike Ring, executive vice president of building services for Park Towne Development Corp., which owns Learning Gardens Child Development Center in Madison, said the center has a salary range of $18 to $22 per hour for teachers. If wages were set below that, he said it would be difficult to attract teachers, which is where state support comes in.
“Five years ago, our pay was probably $14 to $16 or something in that ballpark,” Ring said. “So, it’s gone up pretty dramatically to try and attract good staff.”
