Wisconsin Shares |
Wisconsin Shares is administered by the Department of Children and Families (DCF) and provides a subsidy to low-income working parents (or those getting an education) to help pay for child care. Wisconsin Shares subsidies are available to families who have children younger than 13 and an income less than 185% of the Federal Poverty Level. Funding is also available to families with children up to 19 years of age who have a disability or special health care needs. As of December 2014, 227,286 families and 45,272 children received Wisconsin Shares subsidy payments.
The 2013-2015 budget cut the Wisconsin Shares program by $33.4 million. The Department of Children and Families (DCF) predicted that the decreased funding level would be adequate to meet demand because of reductions in child care costs. However, the budget also allowed a freeze on child care payments that was in place since 2006 to expire, which would permit DCF to adjust child care payment rates if funding is available. Unfortunately, the budget contained no plans to use any potential savings to make much-needed investments in the quality and accessibility of early education.
According to the Legislative Fiscal Bureau (LFB), the Governor’s proposed Wisconsin Shares budget includes modest changes to the program’s 2014-2015 base funding levels. Funding in 2015-2016 would be reduced by approximately $6.8 million while funding for 2016-2017 would increase by approximately $12 million, which would result in a modest overall $5.2 million increase for the biennium. The 2015-16 spending reduction is based on DCF’s projection that fewer families will use the program compared to previous estimates. Increased funding for 2016-17 is largely due to the the implementation of the electronic benefit transfer (EBT) parent pay initiative, which was approved for implementation in March of 2015 by the Joint Committee on Finance. Supporters of the EBT pay initiative claim it will reduce fraud by child care providers. The program will have parents pay child care providers via an electronic payment card instead of the state paying providers directly. Implementation of this new system will cost approximately $8.9 million between March 2015 and June 2017. After June 2017, the new debit card system will cost the state $4 million a year.
According to the Wisconsin Budget Project, the practical implications for the Governor’s proposed Wisconsin Shares budget is actually significantly more positive than indicated by the LFB analysis. The Budget Project indicates that if one compares the Governor’s proposal against actual spending on child care subsidies, not the base level funding for the program in 2014-2015, then the proposed budget bill actually provides an increase of $6.9 million in year one and $25.8 million in year two. This would represent a far more robust spending increase compared to the analysis by the LFB.
According to the Wisconsin Budget Project, the practical implications for the Governor’s proposed Wisconsin Shares budget is actually significantly more positive than indicated by the LFB analysis. The Budget Project indicates that if one compares the Governor’s proposal against actual spending on child care subsidies, not the base level funding for the program in 2014-2015, then the proposed budget bill actually provides an increase of $6.9 million in year one and $25.8 million in year two. This would represent a far more robust spending increase compared to the analysis by the LFB.
Governor Walker's Proposed 2015-2017 Budget as Amended by the Joint Committee on Finance
The Joint Committee on Finance (JFC) reduced funding for the direct child care case subsidy for Wisconsin Shares participants because of cost re-estimates based on more recent caseload projections in the program, which were lower than previously projected. As a result, the JFC reduced funding for the direct child care subsidy by $6.6 million over the biennium: 2015-2016 funding was cut by $12.6 million and 2016-2017 funding was increased by $6.0 million.
Final 2015-2017 Wisconsin Shares Budget
The Legislature approved the Wisconsin Shares budget as amended by the Joint Committee on Finance. As a result, according to the Wisconsin Budget Project, the Wisconsin Shares child care subsidy will be cut by $6.6 million over the biennium. Even though this continues the troubling trend of budget cuts to child care subsidies, the 2015-2017 budget cut is not as severe as the previous two budgets.
According the Wisconsin Council on Children and Families (WCCF), recent trends in the Wisconsin Shares program are troubling for both low-income parents and childcare providers. The number of children served, childcare programs participating, reimbursement rates to providers and program funding levels all trended down between 2009-2013. Recent policy changes and inaction on reimbursement rates by the Legislature have contributed to these trends. Parents now have to contribute much more than their normal co-pay under Wisconsin Shares since the rates do not adequately cover child care prices, thus reducing the number of parents and children participating in the program. In addition, fewer programs are participating because they cannot afford to lose money by serving Wisconsin Shares children.
No matter how one judges the size of the spending increase on child care reimbursement, any increase is welcome after the current 7-year rate freeze. However, according to the Budget Project, much work still needs to done as the the payment rates are still well below what child care providers would need to charge in order to recoup their costs on the open market.
No matter how one judges the size of the spending increase on child care reimbursement, any increase is welcome after the current 7-year rate freeze. However, according to the Budget Project, much work still needs to done as the the payment rates are still well below what child care providers would need to charge in order to recoup their costs on the open market.