When a child's birth is covered by Medicaid, county social service agencies may require the father to pay back Medicaid costs as part of a child support order. (Getty Images)

Gov. Tony Evers is asking Wisconsin counties to give up a practice they’ve relied on for years: clawing back money from the absent fathers of children whose mothers were Medicaid recipients when they gave birth.

The practice is called birth cost recovery. When Medicaid covers the birth of a child and the father doesn’t live with the rest of the family, county social service departments and the courts may add a requirement to repay Medicaid to a father’s child support order.

In his 2025-27 state budget proposal, Evers wants to end the practice, and he’s offering counties a deal to give it up: a nearly $4 million boost for child support agencies.

Although permitted under federal law, only two states now authorize the use of birth cost recovery: Kansas and Wisconsin. Proponents of the practice have argued that it’s only fair to try to recoup state funds spent on the birth of a child if the child’s father can afford it.

But research at the Reproductive Equity Action Lab (REAL) questions the benefits of birth cost recovery when compared to the potential harm it can cause. The lab is affiliated with the University of Wisconsin School of Medicine and Public Health.

“This is a policy that takes money out of low-income families’ hands in the state of Wisconsin to pay the state back for the social services they receive,” Klaira Lerma, the lab’s associate director, told the Wisconsin Examiner. “This creates financial strain on families, and families view it as government greed.”

This week REAL published a policy brief on birth cost recovery. The brief summarizes research by the lab’s director, Professor Tiffany Green, along with Lerma and other contributors, that contradicts assumptions proponents have made.

There were 14,880 unmarried Wisconsin residents who gave birth in 2023. The brief reported that unmarried parents already tend to have lower incomes than married parents, making a birth cost recovery debt especially challenging.

Wisconsin gives counties the option to use birth cost recovery, but doesn’t require it. If a county takes the option, 15% of the money it recovers goes to the county’s child support program, while 85% goes back to the state Medicaid program.

ABC for Health, a Madison-based nonprofit public interest law firm, has been campaigning against birth cost recovery for more than a decade and succeeded in persuading Wisconsin’s two largest counties to drop the practice. Dane County stopped filing new birth cost recovery claims in 2020 and stopped pursuing old outstanding cases in 2023. Milwaukee County quit the practice in 2024.

As part of their investigation of the practice, REAL researchers interviewed 40 Wisconsin parents who had been subject to birth cost recovery.

Parents who live together aren’t subject to birth cost recovery — only noncustodial fathers. Lerma said parents told them they weren’t even aware they might be on the hook to repay Medicaid until there was a formal court order for child support.

“They described a lack of transparency and feeling bamboozled” when they were told about paying back Medicaid, Lerma said.

“Parents clearly described how Birth Cost Recovery payments reduce fathers’ ability to financially support their child(ren) by taking money out of their budget,” the policy brief states.

“You’re taking away the way somebody can feed their family,” one parent is quoted as saying. “You’re taking away child care, how somebody can provide for their family. You’re taking away [money for] health care.”

Another told researchers that a birth cost recovery payment “going back to the state is money that can be put into the child.”

For fathers in low-wage jobs, having to pay off a birth cost recovery debt “puts them in risk of losing housing, the ability to put food on the table,” a parent told the researchers.

“It also causes many marginalized fathers to throw up their hands and leave the lives of their children. And eventually, they may get caught, held in contempt. And once again, that whole cycle just starts,” the parent said. “They’re not going to get a job. They have this on their record. They’re not going to get housing. They’ll be always underemployed.”

Lerma said that in families covered by Medicaid, children are more likely to be at risk for illness. Birth cost recovery, she said, is effectively “taxing these families who are more likely to be facing significantly worse health outcomes.”

The brief cites research that found the financial strain from having to pay a birth cost recovery debt was associated with lower employment levels and less ability to maintain child support payments.

“In contrast, evidence shows eliminating Birth Cost Recovery appears to increase child support compliance,” the brief states.

“Ending Birth Cost Recovery across the state may reduce harm on Wisconsin families and result in more child support money going to children and their custodial parent,” the brief concludes.

To offset the expected loss counties would experience by giving up birth cost recovery entirely, Evers’ budget proposal sets aside $3.8 million over the two-year budget for county child support programs.

The brief says implementing that proposal could ensure “that county child support agencies remain fiscally solvent to carry out their mission.”

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Gov. Tony Evers speaks to a group in Port Washington on Tuesday, Feb. 25, about highlights in his proposal for the state's 2025-27 budget. (Photo by Erik Gunn/Wisconsin Examiner)

PORT WASHINGTON — Holding forth for a crowd of more than two dozen people gathered upstairs from a local coffee shop, Gov. Tony Evers recapped his budget pitch Tuesday for a friendly audience.

The governor highlighted his proposals to hold down or cut taxes for the middle class, increase school funding with particular attention to special education, and make a sustained investment in child care providers.

Evers is touting his budget for providing $2 billion “in tax relief — and it’s all everyday stuff,” he said.

Boosting state investment in public education and in shared revenue with local governments, he added, will in turn make it possible for school districts and municipalities to hold the line on property taxes.  

Evers also made a pitch — to willing ears — for the budget’s $480 million in child care support.

“That is something that, if you agree with me, you really have to work on this issue,” he said.

The governor’s 2025-27 budget  is replete with big proposals, just like each one he’s proposed since taking office in 2019, including provisions for new agencies and vows to invest in sectors that have long complained of underfunding.

And as with  each of Evers’ budgets, the Republican leaders of the state Legislature’s Joint Finance Committee dismissed the governor’s proposals the night he announced them and promised to follow up by stripping all of them from the budget draft on the first day of deliberations. Every biennium since Evers was elected in 2018, they have then built the budget “from the base” — in other words, from the spending plan as enacted in the last budget cycle.

Last week they announced minutes after Evers’ budget address they would follow the familiar script.

Reaching out to voters, supporters

Tuesday’s round table with local officials, small business owners, teachers and residents of the Ozaukee County city was the second in a series that Evers began on Monday with stops in Wausau and Superior.

Evers opened the session with a brief account of his recent visit to Washington, D.C., where he and other governors met with President Donald Trump, and where “people are on pins and needles” amid the drastic changes taking place in the federal government since Trump took office.

The governor emphasized the impending tariffs Trump has vowed to impose — 25% on goods from Canada and Mexico, among others — are “going to be a big deal,” potentially costing the average Wisconsin consumer $1,200 a year.

With that image as the scene setter, Evers went down a partial list of his budget’s tax proposals. He’s proposed eliminating the sales tax on medicine, utility bills, and cash tips for workers such as restaurant servers and others who are paid gratuities. Tips added to a credit card payment would not be included.

Part of the budget’s claim to $2 billion in tax relief reflects putting more state funds into education, shifting the burden for funding schools off local taxpayers.

“We will be investing heavily in public education, and that includes about $3.15 billion for K-12 schools, $800 million for University of Wisconsin System and a $60 million increase in the technical college system,” Evers said. The K-12 education money includes increasing the state’s share of special education funding, now about 30%, to 60%.

His proposal also would nearly double the personal exemption under the state income tax to $1,200 from $700.  For low- and moderate-income state residents who qualify, the state would increase the earned income tax credit. Additional tax relief is aimed at veterans and surviving spouses.

Referring to a recent blockage in federal funding that hit Head Start providers across Wisconsin and nationwide before payments resumed, Evers questioned whether the 60-year-old federal child care and early education program for low-income families might meet an early demise.

“I’m not sure Head Start will survive the federal government” under the Trump administration, Evers said. “And that would cause things to be much, much more difficult” when it comes to child care.

Child care: ‘We’re going to lose providers’

Evers recapped how federal pandemic relief funds enabled Wisconsin to bolster child care providers under the Child Care Counts program. The monthly payments enabled providers to increase wages for child care workers without raising the fees parents pay for child care, but the last payments will end this summer.

“That money is gone, and now we have an industry that is struggling,” Evers said. “If we don’t do something proactive to support them — directly support them — we’re going to lose providers.”

But so far, he added, “I’m not sure the other side gets it.”

Laura Klingelhoets, who owns and is administrator of a child care center in the community of Belgium about 10 miles north of Port Washington, said staffing remains her biggest challenge.

Klingelhoets recalled a recent conversation with a father. His teenage children “can go to work,” he told her. “My toddler cannot go to work. I need the help now — and I need you to stay open.”

Bob Steffes, vice president and general manager at Allen Edmonds, the high-end shoe manufacturer that has its factory in Port Washington, offered Evers one example of how the struggle for child care hits employers:  “We lose about 30% of our female [employees] that get pregnant,” he said.

Dana Glasstein teaches English as a second language and said she has seen “a lot of interrupted learning” for students who miss classes or put off taking them because they can’t get needed child care.

Klingelhoets said she’s had conversations with legislators on the Joint Finance Committee. “I have been very respectful in some of that lobbying,” she said, “but I have been told right to my face that women should not work — they belong at home, and child care isn’t a necessity in our state.”

School funding, lead pipes

Evers’ plan to increase the state’s contribution for special education would add “almost $3 million in our general fund for schools,” said Michael McMahon, superintendent of the Port Washington-Saukville School District. The district will hold a referendum April 1, asking voters to increase their property taxes to fund a new elementary school, replacing one built 70 years ago, McMahon said. The $59.4 million ask also includes money for deferred maintenance. 

“We’ve been taking care of our facilities,” McMahon said. “We just have had to defer that to make sure we’re putting teachers in front of kids and keeping programming.”

Provisions in Evers’ budget proposal would replace sources of lead, from old paint in buildings to lead water pipes. It contains $100 million for renovations removing lead paint in schools, home and child care centers, $7 million to replace lead water lines for home-based child care providers, and $200 million to replace homeowners’ lead service lines.

In Port Washington about 800 lead water service lines need to be replaced, said Dan Buchler, the city’s water utility director. At $7,000 a line, the cost is the responsibility of property owners. 

“We’re putting a huge burden on them,” Buchler said. “Just because you live in a house that has a lead line, you didn’t put that line in the ground. It’s not your fault.”

Urging voters to prevail on their lawmakers

Meeting with voters and urging them to let lawmakers know their concerns has been a standard political tactic for the Democratic governor as he’s confronted Republican majorities in both chambers of the Legislature.

“We need to have people engage with the [budget] bill,” Evers said in a brief interview after the session. “It’s important that people understand that.”

How this year’s budget deliberations unfold could offer a glimpse into the impact of the new legislative maps enacted in 2024 that are more evenly divided between Republicans and Democrats and resulted in a smaller gap between the parties in both houses after the November election.

“Some of Evers’ proposals frequently poll quite well, but a statewide audience has generally been irrelevant to the majority of GOP legislators who represent solidly red districts,” said John D. Johnson, a research fellow at Marquette University who has analyzed poll results and the state’s legislative maps, in an email message.

“However, since the 2024 redistricting, Republicans from safe districts no longer make up a majority of either chamber,” Johnson said. Evers may be “hoping that the Republicans representing swing seats will feel pressure to support popular policies he proposes.” Or perhaps, he added, Evers’ tactic could simply be “a rhetorical move made with an eye to the general election in 2026.”

The same dynamic works the other way, Johnson noted: “Of course, the flip side of this is that Republican legislators regularly try to pass bills they believe to be popular but which they know Evers will veto.”

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