The Governor’s 2015-17 biennial budget proposals show modest increases for child care in a very tight fiscal environment. The increases in the child care budget are noteworthy after years of budget cuts.
1. Increase in Child Care Payment Rates Continued in Wisconsin Shares
Good news! The child care payment rate increases implemented in November 2014 will continue through the next biennium under the Governor’s budget proposal, estimated to be an increase of $8 million in each year of the biennium. The Governor is supporting the recommendation from the Department of Children and Families to continue the increased Wisconsin Shares rates through the 2015-17 biennium.
A one-time $10 million expenditure is also expected in the 2016-17 state fiscal year (SFY) to cover a shift to making child care payments in advance to providers, instead of paying after services are provided, as the Electronic Benefits Transfer (EBT) Parent Pay is rolled out. The budget also assumes a 1% increase in Shares program utilization in the first year, and a 1.5% boost for increasing tiered reimbursement bonus payments in the second year, as more programs move to 4- to 5-star ratings under YoungStar.
Here is an estimate of the child care subsidy expenditures in the current 2014-15 fiscal year, ending June 30, 2015, compared to the Governor’s budget proposal in each year of the 2015-17 biennium.
The budget proposal provides an increase of $32.7 million over the biennium, with increases of 2.7% in the first year, and 10% in the second year, compared to the estimated base budget for SFY 2014-15. So, a modest rate increase after years of frozen rates would continue–a welcome change, after major cuts in every biennium since 2009. To put the child care subsidy budget in perspective, it is nearly $100 million less than the child care subsidy budget six years ago.
2. Electronic Benefit Transfer (EBT) Parent Pay Initiative
The proposed child care administration budget includes $3.1 million for EBT implementation in the second year, and $4.5 million is provided over the biennium for parent pay vendor and IT costs.
3. Increase for the YoungStar Quality and Improvement System
The Governor’s budget proposal also provides an increase for YoungStar contracts of $1.1 million annually to maintain current levels for rating, training, technical assistance, and micro-grants. It is reassuring that child care got an increase in a tight budget, but it will take much more to establish sustainable high quality child care across the state. Maybe this is good step toward a more robust child care system in Wisconsin.