Squeeze remains on childcare subsidies, and the families who need them

It’s getting much more difficult for low-income families in Wisconsin to obtain affordable childcare, a new report says, and while both the Democratic governor and the Republican-led legislature have offered remedies, so far those efforts have fallen short.

The findings are in a brief published last week by the Wisconsin Policy Forum that examines the Wisconsin Shares childcare subsidy program. 

“In 2006, families qualifying for Wisconsin Shares could access 75% of the child care slots without contributing more than their family’s expected copay. By 2017, that share had fallen to 15%, according to figures from the state Department of Children and Families (DCF),” the Forum stated in its brief.

Wisconsin Shares receives some of its funding through a federal grant program that recommends participating states should set reimbursement levels high enough for subsidized families to have access to up to 75 percent of available childcare openings. The federal government recent warned Wisconsin Shares that it could be penalized unless it raises maximum reimbursement rates high enough for at least 25 percent of child care slots to be accessible to subsidized families.

The Forum noted in its report that in his original budget, Gov. Tony Evers proposed increasing funding by $23 million, which would have expanded the number of affordable childcare slots to 50 percent. Republicans who wrote the final state budget cut his proposal in half, expanding the number of affordable slots to 25 percent.

Participating families, who qualify with incomes at or below 185 percent of the federal poverty level, pay for childcare with a state-furnished debit card containing the amount of their subsidy. Family childcare copay rates are set based on family size and income. 

In seven counties, the maximum reimbursement rates for families was enough to cover the cost of care in age groups for 0-1 and 4-5 years old. Four other counties had reimbursement rates affordable enough for the infant age group, and another five had rates affordable enough for the older age group.

“In the remaining 56 counties, the difference between reimbursement rates and average monthly cost ranged from $0.50 to $84.05, with a median difference of $23. This difference would be in addition to any co-payment the family already pays,” the report said. 

The report pointed out that addressing the shortfall could help low-income families in a number of ways, from improving early childhood education to increasing workforce participation. But it acknowledged “competing needs” for federal anti-poverty funds. Still, with the current budget falling short of the standard Evers had sought in his original proposal, “pressure may build on legislators heading into the next budget to come up with the funds for a more substantial increase.”