With federal funds ending, providers say Child Care Counts

MARINETTE – At Kids R Us University, a child care center in Marinette, owner Michelle Peters is loyal to the dedicated employees who care for the children.
Her loyalty means she plans to hike child care fees instead of cutting wages to make up for the loss of a federally funded program.

The Child Care Counts program, which began during COVID-19, is slated to end in June, according to Gov. Tony Evers’ office. Peters said the funding was particularly necessary during Covid, when finding enough help was tough. She closed one of her four locations then and now operates three centers that serve about 140 children full time with a staff of 35. She also offers part-time and before- and after-school care.

“We were required to increase staff wages by a dollar an hour,” Peters said. “We can’t just say the program is ending; we’re going to cut your wages now,” she said. “We have to put a notice out to parents and slowly increase our prices across the board.”

Higher staff wages, combined with the loss of Child Care Counts’ stabilization program funding, are expected to increase the price of child care for parents across Wisconsin. The price hike could be temporary if the legislature approves Evers’ 2025-27 Executive Budget with over $500 million for child care, including $480 million in funds for the Child Care Counts program.

If the budget allocation is approved, Peters and other child-care providers could breathe easier, at least until 2027.

The center hasn’t raised its fees in about 18 months, but Peters said this isn’t an ideal time to ask parents to pay more because of high prices at the grocery store and for other necessities.

The fee for full-time infant and toddler care is about $247.50 per week at Kids R Us University, she said, noting the center has different rates for before- and after-school care. With a ratio of four babies and toddlers to one caregiver, Peters adds staff on an ongoing basis and is glad her employee turnover rate is low.

Peters opened Kids R Us University about 16 years ago with a license for 30 children. Now she is licensed to serve over 200. One key to the center’s growth, she said, is her employee base. “I have been able to maintain a dedicated staff,” Peters said.

With labor shortages at other centers, retaining her employees by maintaining their Covid wage is important to Peters’ continued success.

“Providers have been sounding the alarm that without a long-term state investment, we face a no-win situation: providers will either close their doors or price families out of care,” said Wisconsin Department of Children and Family Secretary Jeff Pertl.

Peters is among the child-care centers owners who voiced their opinion about the importance of continuing government funding. She participated in a child-care center survey and sent a letter to the State of Wisconsin urging continued funding. “I’m just hoping Gov. Evers will come up with additional funds somewhere within the budget to support child care because it’s an important part of children’s education,” she said. “We’re an important piece of having parents in the workforce.”

In a statement, Evers said, “The results of this survey are crystal clear: if we don’t make needed investments to support our child care providers and industry, programs will close, wait lists will get even longer, providers will be forced to raise prices, and parents and loved ones who can’t afford for costs to get any higher may have to leave our workforce.”

The Child Care Counts program has supported 5,600 child-care providers who employ 72,720 child care workers and care for over 417,000 children in the state, Evers said.

Evers is asking for Republican lawmakers to join Democrats in the Legislature and support the Child Care Counts. The program provides funds to child care centers based on headcount with additional funding allocated for children from low-income families and for highly qualified workers.

In February, the program provided centers $87 per week for infants and $68 per week for toddlers aged 2 to 3, plus $25 if the child qualified for the Wisconsin Shares program, according to the state. The per-staff base amount was $74, increasing to $170 for five-star workers.

The program began in 2020 as an Emergency Payment Program during COVID-19, the Wisconsin Department of Children and Families said. The Emergency Payment Program was renewed and then a stabilization program continued funds. Round five of the stabilization program is set to expire at the end of June.

Evers wants to allocate $20.5 million in the new budget to make child-care affordable for low-income families, by capping child-care copayments at 7% of income and waiving copayments for those at or below 150% of the poverty level. For families of four, the maximum qualifying income is $48,225 for a family of four.

The state funds would include $4.3 million for training child care workers, $11.5 million for out-of-school time child care, $5.5 million for employer-sponsored child care and additional funds for IT support, recruitment and other business expenses. Ever also would allocate over $20 million in funds from Wisconsin Shares to increase affordability and IT support.

Without an assurance the funding will be approved, Peters is prepared to implement a price hike in July. “It’s going to go on to the parents. Prices will be increasing at this point,” she said, though they could drop again if funds are approved in the new budget.