Decline in Number of Children Served: Down 10,888 over Four Years

Children served by the Wisconsin Shares child care subsidy program are receiving financial assistance so working low-income parents can afford child care services. Over half of the children served live in families in poverty, and over 90% of children are in families with income below 166% of poverty. The decline in children served is likely due to a loss in jobs for their families, a reduction in child care programs participating in Wisconsin Shares–some of them closed or denied subsidy payments due to anti-fraud and regulatory enforcement.

Decline in Annual Child Care Subsidy Payments:
Drop of $100 million over 4 years

                 Note: The amounts are for child care subsidy payments only; they do not include administration or contracted services.

The $100 million drop in child care subsidy payments reflects a 29% reduction over four years.  Contributing factors to the decline in payments include:

• A decline in children served, affected by loss of jobs due to the great recession;
• Fewer programs participating (some due to anti-fraud enforcement, and some to a decline in regulated child care programs and a decline in child care programs participating in the Wisconsin Shares subsidy program);
• A freeze in payments from 2009 (which actually began in 2006) through most of 2013; by 2013 child care payments were dramatically below market;
• A 5% reduction for all programs that were rated as 2-stars in the YoungStar 5-star quality rating system; and
• Changes in payment policies that no longer paid for child absences for many programs.

13.4% Decline in Average Monthly Payment per Child

The decline in payments has been significant over the 4-year period, but in 2013 the payment per child increased modestly. The decline in payments per child was caused by many of the factors, including frozen payment rates, policies that reduced payments (reduced payments the 5% cut in payments for 2-star programs, and to changes in absence policies), and reduced hours of care because work hours were reduced for parents. The increase in payments per child in 2013 probably reflects:

• The increased payments paid to a growing number of programs meeting higher quality standards (4-star and 5-star programs), and
• Higher payments because of growing number of programs that moved from a 2-star rating to a 3-star rating, and no longer had a 5% reduction in payments.

Analysis by Dave Edie