Wisconsin Shares
The Joint Finance Committee at its May 14 meeting agreed to an adjusted Wisconsin Shares direct child care subsidy budget that is $11.9 million less than the Governor’s proposal for the 2015-17 biennial budget. Compared with the last year’s subsidy budget, the Joint Finance adjustment will result in a cut of $12.6 million in the first year for child care subsidies, and an increase of $6 million in the second year.
Over the two years there is a $6.6 million cut. Note that $10 million of the second year’s budget is a one-time increase to shift reimbursements to advance payment when the electronic benefit transfer (EBT) parent pay initiative is implemented in 2016-17.
While the Joint Finance budget continues the decline in child care funding, the cuts are not as severe as those in the last two biennial budgets. The budget assumes that child care payment rates in place in the first six months of 2015 will continue throughout the biennium. This new EBT system to be rolled out in 2017 system has raised concerns among providers about complicating the process of getting reimbursed and cuts in bonus payments for high-quality programs; however, the card system would also mean that providers would no longer be penalized financially when children are absent.
Child Care Quality
The funding for child care quality and availability programs remains at $15.5 million per year, including YoungStar, child care resource and referral, training and technical assistance, the scholarship and bonus program for child care professionals, and assistance to child care providers in becoming licensed.
Serious Decline Over Time
Child care subsidy expenditures have been significantly less than the budgeted level for several fiscal years largely due to policies that drive down expenditures: frozen rates, a 5% penalty for 2-Star programs, and an increase in paying providers only for attended days. While there has been a modest increase in child care reimbursement rates recently, the effect of the policies overall has been stunning: a drop in annual child care subsidy payments of $113 million since State Fiscal Year (SFY) 2009, and a drop of 13,550 in the average number of children participating monthly in WI Shares since SFY 2009.