In a new survey of Wisconsin child care providers, 25% said they could close without renewed state support. Corrine Hendrickson, shown here at a 2023 event to support the child care sector, said her New Glarus family care will likely have to raise fees. (Photo by Erik Gunn/Wisconsin Examiner)

One in four Wisconsin child care providers could close their doors if the state’s ongoing support isn’t replaced after it ends in June, according to a state-commissioned report released Thursday.

More than one in three providers expect to reduce their capacity for children or the hours they operate, or both, according to the report, based on a survey of most of the state’s licensed child care providers.

The report was commissioned by the state Department of Children and Families (DCF) and produced by the Institute for Research on Poverty at the University of Wisconsin-Madison.

It was released by the office of Gov. Tony Evers to support $480 million for child care providers in his 2025-27 proposed budget — a successor to the state’s Child Care Counts program that was funded with federal pandemic relief money. 

“It underscores what those of us in the field have known for a long time — that is, the need for public investment in order to stave off closures and rate increases,” said Ruth Schmidt, executive director of the Wisconsin Early Childhood Association.

The association supports Evers’ $480 million budget proposal and is holding an advocacy day at the state Capitol on April 16, with plans to meet lawmakers.

In a statement announcing the survey findings, Evers underscored his proposal.

“The cost of child care is too darn high, wait lists are too long, and providers are already struggling to keep the lights on, their doors open, and meet demand for child care across our state,” 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 [their] costs to get any higher may have to leave our workforce.”

Child Care Counts has provided monthly payments to state child care providers since 2021. From November 2021 to January 2024, it was funded from Wisconsin’s share of the American Rescue Plan Act (ARPA), the federal pandemic relief legislation enacted in 2021. The program paid out more than $479 million to providers. After that money ran out, Evers directed another $170 million additional pandemic relief funds to carry the program through June 2025.

Child Care Counts paid out $20 million a month until mid-2023, when it was cut to $10 million a month, with providers getting half of what they had previously received.

The Republican majority in the state Legislature rejected Evers’ proposal to put up to $360 million in the 2023-25 budget to continue the subsidy program at its earlier monthly amount.

Providers have credited the Child Care Counts program with making it possible for them to increase pay for child care workers in the face of competition from other employers without being forced to raise the fees they charge parents.  

About 80% of the state’s more than 4,500 child care providers received and took part in the survey, which was included in providers’ November application for Child Care Counts payments.

The survey included questions about providers’ experiences before and after the Child Care Counts reduction. It also asked about their expectations after the program ends in June, as well as the potential impact of a continued program.

Two-thirds of providers surveyed reported that after the payments were reduced, they raised fees.

Responding to questions about the impact of state support ending in June, 25% or more of providers in the survey said they would be somewhat or more likely to close. Fully 10% of providers said closing their program “was very or extremely likely,” the report found.

“That’s an incredibly concerning statistic,” said Schmidt. “That’s a lot of child care programs that could be pulling up stakes. It’s going to hit rural communities super hard, but across the state we’re going to see significant closures.”

More than one-third of providers — 37% — said they were “at least somewhat likely” to close some of their classrooms or reduce the number of children they serve. Almost that many, 36%, said they were likely to reduce the number of hours they provide care.

By 59%, providers also expect their waiting lists to grow without continued state support.

Providers also expect to have a harder time hiring and keeping employees, with 66% saying that it was “at least somewhat likely” they will have to cut compensation, including their own. Fully half of providers “said this was very or extremely likely,” the report states.

More than half of providers — 56% — said it was at least somewhat likely that more employees would quit, and 46% said staff cuts were somewhat or more likely.

Of providers in the survey, 69% said “that it was at least somewhat likely” they would have a harder time hiring qualified employees.

About half of providers surveyed — 51% — said they thought it would be “at least somewhat likely” that they would find it harder to provide high quality care.

Between one-fourth and nearly half of providers said they expected to have more trouble being able to meet some parents’ specific needs. Those include providing care earlier or later in the day, serving families in the state’s Wisconsin Shares subsidy child care program for low-income families, caring for infants and toddlers or caring for children with special needs.

“With families already struggling to afford child care, respondents repeatedly described how continued funding — whether at the original or at current levels—would help prevent further tuition rate increases,” the survey report notes. Some providers said it would allow them to hold rates at their current level or reduce them, while others said it would keep the rate of tuition increases down.

Corrine Hendrickson, a New Glarus child care provider and organizer of an advocacy group for providers and families, Wisconsin Early Childhood Action Needed (WECAN), said the survey points out “the disastrous results for children and families after the initial [Child Care Counts] funding wasn’t replaced in the state budget.”

Rural areas, where families are younger and have lower incomes, may be hit the most dramatically if the child care sector contracts, Hendrickson said.

Hendrickson said she is likely to have to raise the rates she charges for her family child care center, which has a capacity of eight children. A $30 increase “will put me out of reach for too many families,” Hendrickson said. “If I lose two children and can’t replace them within a month or two, I will have to close.”

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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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