The Decline of Child Care

Wisconsin parents need affordable, high-quality child care in order to fully participate in the workforce and be reliable employees. Wisconsin businesses seeking to expand the state’s workforce also depend on the state’s child care system, since without it far fewer parents would be able to work. But state lawmakers have gradually scaled back the state’s child care subsidies in recent years, leading to a steep drop in the number of families receiving child care assistance, particularly in rural areas.

Now Wisconsin lawmakers have proposed a moderate increase in funding for child care assistance for families with low incomes. The proposed $8 million boost, which would take effect in 2019, represents an important first step towards ensuring that Wisconsin’s child care system meets the needs of workers. Most of that money will go towards an across-the board increase for child care providers. A small portion will be dedicated to increasing payment bonuses for the mostly highly-rated child care providers as determined by YoungStar, the state’s quality rating system.

The proposed legislation, Assembly Bill 924, was approved by the Assembly last week, with only one dissenting vote. From the Assembly it went straight to the Senate floor, where it was approved on February 20th. That’s quite the fast track for a bill that was introduced on February 9th.

Unlike most of the “welfare reform” bills that are making their way through the legislature, improving access to child care would actually help more people find and keep a job. But this modest increase doesn’t go far enough in addressing years of frozen funding that have limited families’ access to child care.

The damaging effect of investing less in child care shows up in the decline of the number of working parents who have access to subsidized child care. In 2011, about 54,000 Wisconsin children were in families that received assistance in paying for child care, a number that plummeted to 38,800 in 2017 – a 28% decline. The number of children receiving subsidies dropped in 71 out of 72 counties in Wisconsin.

The decline in the number of children served was particularly steep in rural counties, with the result that assistance for paying for child care is nearly non-existent for working families in northern, rural Wisconsin. Between 2001 and 2017:

• the number of children receiving child care assistance fell by 80% in the 30 least populated counties; and
• in 11 of the small counties, the average number of children receiving child care subsidies each month fell from 50 or more in 2011 to five or less in 2017.

One of the reasons that so many working parents have lost access to child care is that the state has reduced the amount of money it pays child care providers. The new investment of $8 million would roll back part of that decrease, but only part. Fully restoring payment rates would require an investment of $62 million, according to the Legislative Fiscal Bureau, leaving Wisconsin’s child care system still $54 million short even after the proposed increase.

The limited scale of the proposed investment in child care stands in stark contrast to the cost of other, less effective steps lawmakers have taken with the purported goal of expanding the workforce, including:

• Eliminating nearly all state income tax liability for manufacturers and agricultural producers, a tax break that will cost an estimated $276 million this year without requiring the creation of a single new job.
• Approving nearly $4.5 billion in public assistance for Foxconn in coming years, with $1.6 billion of that amount not related to job creation.
• Proposing to require that parents of school-age children participate in an employment and training program in order to receive FoodShare benefits, at a cost of $68 million a year.

Improving access to child care is an effective means of expanding Wisconsin’s workforce. The new investment proposed by lawmakers is likely to increase opportunity for Wisconsin workers and businesses, if only on a small scale. Lawmakers could expand the workforce farther by continuing to improve access to child care subsidies.