March 20, 2011
Cuts in the Wisconsin Shares Child Care Subsidy Program
Governor Walker seeks to cut child care support for low-income families. Despite increased need, Walker is cutting the budget for Wisconsin Shares, the state child care subsidy program under the Wisconsin Works (W-2) program. Through Wisconsin Shares, parents with children who are disabled or under the age of 13 may receive a child care subsidy to allow them to participate in work or education activities. Cuts could happen in three ways:
1.) This budget authorizes the Wisconsin Department of Children and Families (DCF) to implement a waiting list for Wisconsin Shares, which would leave families without the child care they need to work and/or participate in the Wisconsin Works program. It would force families living in poverty to choose between leaving their children without quality child care—possibly even unattended—or giving up their job and income.
2.) The budget also allows DCF to adjust income levels for eligibility in Wisconsin Shares, leaving more families without subsidized child care. The program is currently limited to families with gross income up to 185% of the federal poverty level ($26,952 for a family of two, $40,788 for a family of four) (eligible families retain eligibility until gross income exceeds 200% of the poverty level for two months). In Wisconsin, the average annual cost of childcare for before- and after-school care for one school-aged child in a family child care home is $7,153, and the prices are even higher for young children and for center-based care. Without subsidies, many families near 200% of the poverty level would have trouble finding affordable quality child care.
3.) Those who remain in the program may face higher co-payments for their child care. Co-payment expectations are based on income and number of children. For example, for a family of two with a gross income of $18,216 (at 125% of the poverty level) with one child in childcare, the weekly copay is $36–that is, $1,872 a year. Currently co-payments are capped at 12.5% of family income, but this budget authorizes DCF to increase this cap. This increase would put further strain on families working to escape poverty.
The Importance of Child Care Assistance
Funding for child care subsidy programs are investments in a family’s current wellbeing and future. Research indicates that lack of access to child care assistance makes families more likely to go into debt or face difficult choices between essentials in their household budget (such as between paying for child care or paying for rent or clothes). Parents are also more likely to choose lower-quality child care that is less beneficial for their children and less stable child care that limits parents’ ability to maintain employment. Finally, child care subsidies are associated with better employment outcomes for low-income parents; low-income mothers who receive child care subsidies are more likely to be employed, to stay off welfare, and to have higher earnings. For an overview of research on the benefits of child care assistance, see this article from the Center for Law and Social Poverty.
