Expenditure Trends: The Wisconsin Shares child care subsidy program is on track to spend about $25 million less than budgeted in subsidy payments in the second year of the biennium ending June 30, 2013. The budget projection by the Department of Children and Families for Wisconsin Shares subsidy payments for SFY 2013 was $273.3 million. If the spending trends of the first 6 months continue, the spending level for subsidy payments will be $248.6 million, an underspending level of $24.7 million.

Implications: If this trend continues, it will be the second year of underspending in Shares. In SFY 2012 about $9 million in Temporary Assistance for Need Families (TANF) funding was shifted from Shares to other line items. The projected drop in expenditures in SFY 2013 appears to be primarily the result of:

• 5% cut for 2-star programs: Wisconsin implemented a 5% cut for child care programs rated as 2-star in the YoungStar quality rating and improvement system effective July 1, 2012. Since over 65% of child care programs participating in Shares were rated as 2-star and received this cut, it had a large impact on expenditures.
   
• Frozen base payment rates: Wisconsin continued a freeze on base payment rates in Shares at 2006 levels, without even inflationary increases.
   
• A 5% reduction in the number of children served: The monthly average number of children served dropped by 5%, from 52,812 in the first six months of SFY 2013, compared to 50,275 for the 12 months of SFY 2012.
   
• Payments for attended days only: The policy to pay licensed family child care centers only for attended days has also reduced payments, since young children are often absent due to illness.

Data source: Department of Children and Families, http://dcf.wi.gov/childcare/wishares/reports.htm.