State Budget: Early Care & Education

by Daithi Wolfe | April 1, 2025

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We envision a Wisconsin where every child thrives. Quality early childhood education is essential to healthy development, and investing in our youngest Wisconsinites leads to lifelong benefits. Children who have access to high-quality child care tend to have overall enhanced educational attainment, improved career options in adulthood, higher earnings, and improved health outcomes. 

Child Care is Unaffordable and Unavailable

Child care is unaffordable for families across the state. Between 2022 and 2023, child care tuition increased by an average of 14%, far faster than the 5% inflation rate of other goods and services. For example, those living in the 9 most populous counties in Wisconsin, have experienced child care increases that translate to approximately $200 per month in added expenses beyond their average monthly costs: a family with one infant and one toddler pays around $2,890 for Group Child Care (typically in centers) or $2,275 for Family Child Care (typically within a home).

Child care is unavailable for many families with infants and toddlers who are in need of access to care; 34,000 infants and toddlers in Wisconsin—in both small and large communities— don’t have access to safe and regulated care today. Seventy percent of rural areas in the state are experiencing an extreme child care deficit, meaning that there are more than three children under age five who may need child care for every one licensed child care slot available to provide child care in that area.

The Child Care Crisis Hurts Families of Color

Wisconsin’s child care crisis hits families of color particularly hard because families of color are more likely to pay a larger share of their income for child care than white families. A typical, median-income Black family with two young children would have to spend 56% of their income on child care, a larger share of total family income than that of any other group. This disparity exists because of generations of unequal access to housing, employment, and other barriers to economic opportunity. Also, child care work—one of the lowest paid professions (wages of approximately $13 per hour)—is disproportionately made up of women of color. Low wages lead to turnover, which adds expenses for training and reduces consistency and quality. As a result, there are many available spots in child care programs that cannot be filled due to staffing challenges. 

Child Care is Essential for a Thriving State Economy

Employers across the state have named lack of child care a number one priority to solve, to address the worker shortage that they are facing. Business owners say that, “Supporting the workforce behind the workforce is critical to ensure small businesses are able to attract and retain the staff needed to grow.” 

Supporting Families in the Budget

Governor Evers has declared 2025 the “Year of the Kid,” advancing investments and recommending policies to support children and their families. These would help our working families lay a strong foundation of economic security and promote positive long-lasting effects for  children. Considering Wisconsin’s strong fiscal position, it’s time for Wisconsin to spend the People’s money on supporting our hard working families with young children. 

Programs That Are Closing or Fighting to Stay Open Deserve Support 

Child Care Counts was set up in March 2020 to support child care providers during the pandemic and beyond, but child care hasn’t been sufficiently invested in for decades. Timely direct payments from Child Care Counts gave financial stability to programs that they needed to pay their staff competitive wages, prevent price hikes for families, and keep the lights on. Reducing parent co-pays makes the cost of care more manageable, as would the proposed employer grant program that supports employees with their child care needs. Because of these essential funds, our state has had far fewer child care sites close than in other parts of the country. With Child Care Counts funding scheduled to end in June 2025, and federal pandemic funding gone, further dramatic price hikes are expected, placing more pressure on families’ already-strained budgets. Kids Forward supports the Governor’s budget proposal that provides $440 million in state funds for Child Care Counts. This would be a permanent line item in the budget, and although not enough for full funding, it would provide critical foundational investment. 

Child Care Workers Are Severely Underpaid and Deserve Support

Governor Evers takes on the twin issues of the exorbitantly high cost of child care and the abysmally low wages for the child care workforce. His budget recommendations present solutions to both of these problems. Along with full funding for Child Care Counts, raising the reimbursement rate means that early care and education programs can both keep tuition more affordable AND pay their staff more livable wages.

Reducing parent co-pays also makes the cost of care more manageable, as would the employer grant program that supports employees with their child care needs.

Other budget actions to support families and child care providers include:

  • investing over $5.5 million to support employers in responding to specific employee and community needs, such as on-site child care, child care subsidies, and contributions to a Dependent Care Flexible Spending Account for employees. This provision directly responds to the business community’s priority needs through the “Employer Grant Program”, which is a creative and collaborative approach to the child care  crisis;
  • capping co-payments for all families who use the Wisconsin Shares child care subsidy program and eliminating copayments for lower income families. Right now, everyone enrolled in Wisconsin Shares is assessed a minimum copay, regardless of how little their household income is. This would make child care more affordable and could increase participation in the program, especially for families with lower incomes who have difficulty paying monthly copayments;
  • raising reimbursement rates to 75th percentile (currently 50th). Wisconsin is now ranked 48th out of 50 states because of our inadequate reimbursement rates. In 2022, the maximum assistance amount provided by this program covered the cost of child care for 74% of child care slots in Wisconsin, but by 2023, this amount would only cover the cost of child care for 50% of the child care slots across the state; and
  • reducing waitlists and filling available child care slots. The Governor’s budget asks for $10 million to, among other things, build capacity to improve access to quality child care in the state. This includes waiving training costs, recruitment and retention of a well qualified workforce, and providing support for the industry to improve stability and wages.
  • Daithi Wolfe

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