Do child care budget priorities have a shot? Stakeholders and those with influence share thoughts

WAUSAU, Wis. (WSAW) - Budget season brings all kinds of people, organizations, and lobbyists out to make a pitch for state funding. This is especially so when there is a $7.1 million budget surplus, which includes one-time and ongoing funding opportunities. Child care has a leg up this season as the governor put it in his budget request, and parents and employers are echoing the need for solutions to the complex layers of challenges, but how realistic are these requests?

To answer that, you have to look back at what happened during the pandemic, even a little before. Just ahead of the pandemic, the state funded a study to look into the child care industry that was saying it was in crisis. The study laid bare many of the realities providers, communities, and parents face finding accessible, affordable, quality child care, with many communities being labeled “child care deserts” for having fewer spots available than children below the age of 5.

As the pandemic hit, the problems in the industry were exacerbated. Many providers that were barely surviving as it was, closed altogether.

“At that point, 60% of centers across the state of Wisconsin were closed,” Wisconsin Department of Children and Families Sec. Emilie Amundson explained. “They needed our help and the Joint Committee on Finance really led the charge to make sure that we helped those programs through the Child Care Counts program.”

The Child Care Counts program was created using American Rescue Plan Act dollars to help stabilize the child care industry. Licensed, certified, or public school license-exempt child care providers can use it on things like operating expenses, professional development, enhancements to high-quality programming, mental health services for children and employees, copayment relief for families, and employee retention and recruitment efforts.

“And now we’re asking that this nation-leading program continue as a state investment moving forward,” Amundson stated. “I think that that’s an opportunity for us to say, you know, from an economic development perspective, from a workforce development perspective, what we know communities need in order to stay strong. We need to keep a program like this going.”

Child care professionals and advocates say maintaining the Child Care Counts program is the most urgent of the priorities under the child care requests, even if it is just for a little while.

“Child Care Counts funding is the number one priority that we need to see happen for a child care providers,” Kelly Borchardt, the executive director of Childcaring said. “There needs to be that immediate support financially for them to stay, keep their doors open.”

“Two more years of this,” Stephanie Daniels the child care services director at the Woodson YMCA began. “There could be some massive change that could... we could figure out building partnerships with private entities maybe at the local level, but if that ends in January, I don’t think there’s enough time to figure out what all the solutions are besides putting the burden on the parents.”

The governor’s budget request asks for $340 million to permanently establish the Child Care Counts program using $302 million in general purpose revenue and $38 million in Temporary Assistance for Needy Families/Child Care Development Fund dollars.

“He’s put in $340 million, the advocates have come into my office and wanting $300 million. I don’t know, that’s going to be a hard sell on my side of the aisle,” Rep. Pat Snyder, the Republican chair of the Children and Families Committee said.

Overall, Rep. Snyder said he thought the Child Care Counts program has been effective and is supportive of the program. He wants to learn more about whether it should be funded at the level the governor requested, however. But, he is open to the so-called three-legged stool of parents, businesses, and government supporting the child care industry.

“I’ve got forces that say, ‘Hey, Pat, we can do a lot.’ And then I got forces on the other side, saying, ‘We can’t subsidize anything.’ So, it’s trying to find the right sweet spot we can all meet and realize this is an economic development. This isn’t giving money away force for business, you know, for people to have their kids watch this is in order to draw people here to Wisconsin, to work in Wisconsin and to have a good workforce.”

Child Care Counts was not the only program born out of the pandemic; Partner Up! provided funding support to businesses that provided child care as a benefit to their employees. Many of those businesses that applied and received those grants were child care providers themselves.

“I talked to folks today, who are able to send their kids to the center where they currently work,” Sec. Amundson explained. “We’ve had centers that use that as a recruitment retention strategy. So, the center pays for a little bit of the cost of child care, and the state picks up the rest. And that amounts to a huge benefit for the employees.”

The governor’s budget asks for $22 million over the biennium to continue the program.

“We’ve been trying to pay attention to the Partner Up! program, which is super innovative in that it pays the true cost of care,” Borchardt said. “So, it allows for child care staff to be paid at a higher rate, because the amount of funding that the child care program is receiving for that slot is higher than you would typically charge. And right now, the Partner Up! program takes funding from the state, as well as the employer to pay for that slot, again, at the true cost of care. So, it infuses more capital into the childcare program to be able to pay the teachers a higher wage.”

Bryan Bailey, the CEO of the Woodson YMCA explained to Sec. Amundson in a meeting concerns going forward when the Partner Up! funding ends, especially as a business that is also a child care provider.

“You keep a wage line, someone’s making $15 an hour and you say, ‘you still got to pay for half your child care.’ And they’re going, ‘I can’t afford that.’ And then you go, ‘well, we’ll give you 100%,’ and then I go, ‘I can’t afford that.’”

Rep. Snyder did not say whether he supported this particular element of the budget request, but agreed that providers need to be paid more to keep quality educators in the industry. He mentioned something the business community has brought up in child care conversations, that the state could have an opportunity to help businesses through a tax credit, incentivizing and helping employers subsidize part of their employees’ child care. Dave Eckmann in a meeting with Sec. Amundson expressed interest in a tax credit benefit on that front as well to especially help small and medium-sized businesses that cannot afford to pay for their employees’ child care costs.

Sec. Amundson is optimistic heading into the budget season, reminding everyone that the programs created during the pandemic were efforts from speaking with local communities and stakeholders, and working with both sides of the political aisle.

“It’s been a wonderful place for us to find that bipartisan consensus for us to work with legislators from both sides of the aisle. Folks know that this is an economic imperative if communities are going to get strong if folks are going to get back to work and continue to work, and industries are going to continue to grow.”

The governor’s budget also makes these requests for child care funding:

• Expanding the Child and Dependent Care Credit which the requests states would provide nearly $30 million in relief to about 107,000 Wisconsinites;
• Allocate “$124.7 million TANF over the biennium to migrate Wisconsin Shares to a full-time/part-time model for calculating subsidies to align with federal child care requirements, including waiving copays for Wisconsin families under 100 percent of the federal poverty level;”
• Add $10 million TANF for the New Provider grant program over the biennium to help newly certified and licensed child care providers. Half a million would be earmarked to providers in Tribal areas;
• Invest “$1.6 million all funds over the biennium into a new quality early childhood education center in Milwaukee, continuing funding for child care programming in financially disadvantaged areas within the city of Milwaukee, and providing $875,000 TANF over the biennium to Tribal child care contracts to support recruitment, retention, and expansion of child care providers in Tribal areas;”
• Use $1 million TANF over the biennium to Boys and Girls Clubs Wisconsin After 3 programs, plus “$2.6 million GPR over the biennium support for their youth mental health and substance use prevention efforts;”
• Invest “$3.29 million over the biennium in social-emotional training and technical assistance in child care settings with the goal of reducing instances of children being removed from daycare for behavioral issues;”
• Provide “$600,000 TANF over the biennium for a $10,000 income disregard for direct care workers applying for Wisconsin Shares Benefits; and”
• Migrate “the child care provider licensing application process to an online platform with $1.42 million over the biennium.”

Gov. Tony Evers also included the creation of a Paid Family and Medical Leave program.

“The weeks after welcoming a new child are critical for families to have time together and for kids’ future development,” Gov. Evers stated in his budget address in February. “Tonight, I’m announcing that we’re going to create a statewide program that will provide most private-sector workers in Wisconsin paid family and medical leave for 12 weeks, and we are going to invest more than $240 million in state funds to get that program started.”

The program, as laid out by the Evers Administration, would also allow “unforeseen or unexpected situations like the closure of a child care facility, aftermath of domestic violence and sexual assault, having a serious health condition such as medical quarantine, caring for family members with serious health conditions, and military deployment for service members and their spouses, kids, and parents.” The administration proposes the program to be administered through the Wisconsin Department of Workforce Development beginning Jan. 1, 2025.

Dreaming up solutions

While how the dollars are laid out in the budget for child care matters to local communities, another pandemic-era program has given communities the opportunity to work on local partnerships and solutions. In the summer, DCF announced the recipients of the first round of Dream Up! grants, which awarded communities with high child care needs and gaps $75,000 in grant funding and strategic planning support. Additional $5,000 stipends are given to child care providers that submit updated business plans during the strategic planning process.

Marathon County was among the community teams awarded the grant. Over the last nine months, the team made up of local government officials, chambers of commerce representatives, Childcaring, child care providers, and community organizations like the United Way met to get on the same page about the problems, find a focus to address the root of the problem, and come up with a plan to allocate the money.

“It brought a lot of community stakeholders together and started us thinking creatively,” Bailey said.

“We think the key to solving the issues is around the childcare workforce,” Borchardt stated. “If we can figure out how to retain the workforce, how to pay a livable wage to our childcare teachers, I think that’s the key.”

That includes both center-based care providers and in-home family care providers.

“It became very apparent that the need for the family child care had not been really addressed at all,” Elsa Duranceau with North Central Wisconsin Workforce Development Board said.

That is why the team decided the bulk of that $75,000 is going to help providers in a variety of ways.

DCF approved the team’s budget proposal. Since the grant was awarded to the county as the applicant, the county must approve the budget in order for the funds to be used. That is expected to be handled in the county’s regular board meeting this month.

“I think from there, you know, I would encourage a place like Marathon County, to really look at what’s out there in terms of private foundation funding, in terms of other government grant programs that might help them actually put large dollars behind some of the more innovative ideas that they might have as part of their plan,” Sec. Amundson suggested. “This is really, it’s about collective impact. It’s about bringing people to the table, the dollar figure is relatively small. So what I hear when I talk to people about the Dream Up! grant is the power is in the conversation. It’s not necessarily in that $75,000 implementation grant.”

Following its meeting with the secretary, the team met again to go over the next steps. United Way’s Ben Lee said his organization may be able to play a part in the community solution, but any role they would play would have to be requested by mid-April for the organization’s RFP deadline.

Team members said they feel they are on the cusp of the start of something, but they need time to continue building community partnerships and brainstorming ideas and resources available within the community. Borchardt urged again, continuing the Child Care Counts program would allow them the time to build that partnership infrastructure and figure out long-term solutions. She added this is especially important as more communities apply for the third round of Dream Up! grants, as they will ultimately be receiving those grants at the end of the funding availability.

To learn more about the complex child care challenges in Wisconsin, check out our Daycare Dilemma series by clicking here.

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