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Local News

Child Care Providers Brace for Sharp Cut Six Months Sooner Than They Expected

Credit: iStock

by Erik Gunn, Wisconsin Examiner

Supplemental funding that has helped Wisconsin child care providers improve pay for their employees and hold down tuition costs for the families of children in their care will be cut in half starting in June.

Providers learned of the change Tuesday, less than six weeks before they will have to adjust to the new, lower supplement. 

A spokesperson for the Department of Children and Families (DCF), which administers the supplemental funding program, said Wednesday that federal officials were responsible both for the cut in how much providers will receive as well as new restrictions in what expenses the money can be used to offset.

The change caught providers off-guard — among them, Corrine Hendrickson, a New Glarus child care provider and cofounder of a provider advocacy organization. “This is affecting our ability to run our businesses, because it’s such short notice,” Hendrickson said.

The change comes amid a campaign by child care providers and advocates to include $319 million in the 2023-25 Wisconsin state budget to continue the supplemental funding, which was otherwise scheduled to end in less than a year.

DCF launched the supplemental funding program, called Child Care Counts, in 2021 to help stabilize struggling care providers upended by the COVID-19 pandemic. The department has used federal pandemic relief money from the American Rescue Plan Act (ARPA), enacted in March 2021, to fund the support.

Providers say the funds have helped them boost wages for child care workers, who have been in short supply since even before the pandemic, while avoiding tuition hikes that could be unsustainable for the parents who depend on their services during the work day. 

Each month, providers reapply for funding, reporting their enrollment, staffing and other data. The corresponding payment arrives at the beginning of the next month.

Since the program launched in November 2021, it has provided about $20 million a month in stabilization payments to child care providers statewide. Starting in May, that will drop to $10 million a month, according to DCF communications director Gina Paige. In addition, some costs that were covered previously will no longer be eligible under the program as of May, she said via email.

Paige told the Wisconsin Examiner the cuts were the result of changes in the specific federal sources covering the program.

Child Care Counts has been operated in nine-month rounds. By organizing the program that way, DCF was able to make changes in subsequent rounds, Paige said — including making additions such as a bonus payment for providers who offer care in the evenings or on weekends. 

May marks the start of the program’s third round. “The funding for this third round is different than the funding that was used for the first two rounds,” Paige said. “It is less flexible and has different requirements on what it can be used for, which makes it difficult to braid with other funding.”

For example, the previous two rounds allowed Child Care Counts money to be used to offset tuition and fees for all families, Paige said. For the third round, “this new federal source only allows for providers to relieve tuition for families who are utilizing Wisconsin Shares” — a state child care subsidy for families with low and moderate incomes. 

Hendrickson operates a home-based family child care with up to eight children. She is also cofounder of Wisconsin Early Childhood Action Needed (WECAN), which advocates for providers and families. 

Providers did not hear about the changes until Tuesday afternoon, as part of a monthly webinar that the department conducts with them, Hendrickson said. 

Given their magnitude and how soon they take effect, “The timing is terrible,” she said. Providers needed to have been told much sooner, to give them “more time to prepare for their [client] families, because you’re talking about their income, you’re talking about their ability to pay their bills — ours as the owners, [but also] the parents.”

She has calculated her center’s payment for June will go down about $800 due to the changes. She expects to have to raise tuition 13%, or $25 a week, as a result. “We’re talking six weeks from now.”

Providers with much larger enrollments could see much larger cuts. “Several of our group centers are looking at $10,000 or more,” Hendrickson said. 

Paige and DCF have not commented on when the department learned that it would have to cut funding for the third round. 

Hendrickson said many providers have already made their plans and budgets based on the belief that the third round would not be significantly different than the first two. Previous changes from round to round were “slight,” Hendrickson said. “These are drastic.”

WECAN and other advocates have been calling and emailing lawmakers to urge the Legislature’s Joint Finance Committee to provide continued funding for Child Care Counts in the 2023-25 state budget when the ARPA funding runs out. Gov. Tony Evers included $319 million for that purpose in his proposed budget, and speakers at the budget committee’s listening sessions have urged lawmakers to keep it in the spending plan. 

That advocacy work was premised on the assumption that the funding would remain at previous levels through the rest of 2023. The message has been that the support holding off tuition hikes and propping up wages would go away in January 2024 unless lawmakers agree to include the provision in the new budget, Hendrickson said.

The new, more immediate reduction “makes it difficult for us who have been advocating and working with people and getting them to understand what’s been going on,” she said. 

For Sen. Kelda Roys (D-Madison), who sits on the budget committee, the worries providers are having over the immediate reductions send a message about the importance of extending Child Care Counts in the budget. 

“It’s a tiny preview of what’s to come if the Joint Finance Committee does not [include the funding] and votes to basically kill this program — and with it a huge swath of the child care that is still available,” Roys said.

This story was written by Erik Gunn, Deputy Editor at teh Wisconsin Examiner, where this story first appeared.

Wisconsin Examiner is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Wisconsin Examiner maintains editorial independence. Contact Editor Ruth Conniff for questions: info@wisconsinexaminer.com. Follow Wisconsin Examiner on Facebook and Twitter.