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July 23, 2024 3:32 am

Local News

Survey: Without Continued Support, Child Care Providers Could Hike Tuition, Cut Wages or Shut Down

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by Erik Gunn, Wisconsin Examiner

More than half of Wisconsin child care providers in a new survey say they’ll have to raise tuition without continued state support next year, and more than one in 10 say they might have to shut down.

The survey was conducted by a child care advocacy group as state lawmakers consider how and whether to continue the support that providers began receiving during the COVID-19 pandemic to help them raise wages, attract more employees and hold down tuition costs.

The survey findings depict precarious circumstances for a service that has become crucial for working parents and their families and employers who struggle to hire workers.

“I think that this report really shows that child care needs investments because parents can’t shoulder the bill and child care professionals are no longer able to shoulder the bill,” said Corrine Hendrickson, cofounder of Wisconsin Early Childhood Action Needed (WECAN), a group that consists of child care providers, educators, parents, community members and employers.

The survey was conducted online in April and received responses from a total of 541 Wisconsin child care providers, including licensed family care providers and group child care centers. It was conducted in conjunction with Main Street Alliance, which organizes small business owners and helped distribute the survey to members and the findings to policymakers. Hendrickson is a leader with the alliance as well. 

While the child care field has been struggling for years, the COVID-19 pandemic highlighted the critical nature of the service for many working families and for employers seeking to fill job openings.

Through federal pandemic relief funds, the state Department of Children and Families (DCF) provided a series of stabilization payments under the name of Child Care Counts for child care providers. The funds enabled many providers to increase wages for child care workers and hold down tuition costs for parents. 

Those funds will end in January 2024, and Gov. Tony Evers, in his proposed 2023-25 state budget, has included $340 million to continue Child Care Counts payments beyond the current expiration date. 

In a motion Tuesday that removed more than 500 items from Evers’ proposed budget, the Legislature’s Joint Finance Committee left the child care funding alone. The panel’s intentions for the program, however, will only become clear when it takes up the DCF budget in the next several weeks.

The WECAN survey report, which the organization distributed Tuesday, shows that child care resources have been diminishing in Wisconsin for more than a decade. Since 2007, when there were 9,692 licensed child care centers in Wisconsin, the number dropped to 4,215 as of 2023, according to the report.

The largest shrinkage has been among family centers — those located in a private home and caring for up to eight children. Wisconsin has lost more than 5,477 of those since 2007. By contrast, the number of group centers, caring for more than eight children, has dropped by 286 in the same period.

While the pandemic threatened the survival of many providers, pandemic relief helped stabilize the field. The number of providers has been essentially level over the last two years, Hendrickson said in an interview.

More closures could be on the way, however. According to the WECAN survey, more than 12% of providers who responded said they would have to close their child care operations if the state’s current support doesn’t last.

More than 55% of providers in the survey said they would have to raise tuition if the support ends. Currently Wisconsin providers charge $9,000 to more than $12,000 a year to care for children from birth to age 2, and $8,000 to more than $10,000 to care for children ages 3 to 5, according to the survey report.

Child Care Counts has covered about 25% of the revenue for providers, the report states. To replace that money, the report projects increases in tuition to $11,250-$15,705 for children birth to age 2 and to $10,000-$12,550 for children ages 3 to 5.

“Earnings for parents will need to increase by $1.50-$1.75 an hour per child to cover [such a tuition increase], many will be forced to stay home because they can’t afford care or will pull their child from regulated care and friends, family, and neighbors will be further relied upon and adjust their work schedules accordingly,” the report states.

Among providers in the WECAN survey, 17% said they would probably have to reduce wages for employees without a continuation of the Child Care Counts funding. That could further exacerbate the shortage of child care workers, however; in the preliminary companion survey of employees, more than 60% said they’d quit the field if their wages dropped.

“It’s exactly what we’ve been saying for a long time,” Hendrickson said. “It’s the wages that are the problem, and support income from the government helps parents afford to pay [for child care] and allows providers to offer better pay to teachers.”

Even with the current support, Hendrickson said, the child care field has become increasingly challenging. Providers said in the survey that younger children, who were less likely to get broader socialization during the pandemic, are coming into child care settings with more challenging behaviors. With many less-experienced teachers, learning how to handle those has become more difficult, she said.

Hendrickson said that the proposed $340 million infusion can help stabilize the child care system, but a longer term solution is needed to provide adequate care that working families can afford while ensuring the best early education environment for children.  

While the WECAN survey focused on the prospect of losing the Child Care Counts money entirely starting in 2024, providers have been hit with a more urgent loss of funds: Starting in June, the current pandemic-relief support money will be cut in half, to $10 million a month statewide from $20 million a month. 

Hendrickson said several of the survey respondents reported that changes they had projected without the program next year could happen much sooner because of that cut, including wage cuts or program closures. Tuition increases could also come sooner, although they would be delayed by contracts that have already been signed with parents, she said.

Update: This article was updated after publication to include the involvement of Main Street Alliance in connection with the child care providers survey.

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

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