Business campaign raises its profile for childcare aid in state budget

by Erik Gunn, Wisconsin Examiner
May 16, 2023

Close to 100 business organizations, chambers of commerce, economic development agencies and nonprofits have signed on to a campaign to provide continued supplemental childcare funding in the next state budget, childcare advocates said Monday.

“The bottom line is without accessible, high-quality, and affordable child care, attracting and retaining employees will remain a pressing challenge,” a letter signed by the Wisconsin Restaurant Association, the Greater Milwaukee Committee and scores of other endorsers of the campaign states. “We therefore ask you to advance a significant long-term state investment in childcare in the 2023-25 state budget because inaction will further shutter childcare programs and continue to hamper vital efforts to stabilize the workforce.”

The Greater Milwaukee Committee is a civic group whose members include corporate executives as well as nonprofit leaders in the state’s largest city. Other signers include an assortment of manufacturers, restaurants and related businesses, health organizations, nonprofits and advocacy organizations — 99 in all according to information posted Monday.

Raising Wisconsin, the coalition that organized the letter, said it was being sent this week to the co-chairs of the Legislature’s Joint Finance Committee, which is working on the 2023-25 state budget. Raising Wisconsin was organized by the Wisconsin Early Childhood Association (WECA) to mobilize support for additional state funding for child care in the new budget.

“A significant state investment in high-quality child care will result in an important variety of positive business outcomes, including employee performance, productivity, and safer, higher quality operations,” the letter states. “This is particularly important in a manufacturing-heavy state like Wisconsin.”

The letter doesn’t specify a dollar amount, but Raising Wisconsin and other childcare advocates have focused on the $340 million that Gov. Tony Evers included in his budget proposal in February. The money would continue funding that was first provided by federal COVID-19 pandemic relief funds.

While a number of signers have already been on record for months supporting the proposal, such as the small business organizing group Main Street Alliance and some of its prominent business members, Monday’s announcement indicated that the campaign has broken through to some long-established business groups and business owners.

Childcare economics analysis bleak

On Friday, the Wisconsin Policy Forum released an analysis of childcare economics that largely followed the lines of what advocates have been arguing for years — that wages have been historically low for childcare workers, while raising them would price childcare fees out of the range of many families who rely on the service. 

While the forum does not make recommendations, its report noted: “Given the state’s sizable budget surplus and overall sound financial health, the upcoming two-year budget offers the best opportunity in decades to ensure that high-quality, affordable early childhood care and education is available for all Wisconsin residents, and that the economic challenges facing early childhood centers, workers, and families are alleviated.”

Under the Child Care Counts program, the Department of Children and Families has paid childcare providers additional funds to enable them to raise wages for childcare workers, address other costs and hold down tuition for families.

The business letter released Monday said Wisconsin childcare providers had struggled for years with “very limited state support” and “an inherent market failure of the childcare business model” even before the pandemic. Fees for child care, “despite being costly to families, do not cover the full cost of programs providing high-quality care,” the letter states. 

The letter reiterates what childcare providers, outside observers, and workforce analysts as well as business operators have been emphasizing for the last two years: that a lack of access to childcare has been a significant barrier to finding workers despite widespread job openings across many sectors of the economy.

The federal support that came during the pandemic “did not, and was not intended to address the flaws of the existing system,” the letter adds. “As a result, most child care programs are still struggling and remain at a critical breaking point, which, in turn, impacts our ability to recruit and retain employees.”

Providers and advocates say the central challenge childcare programs face is how to hire and adequately pay early childhood educators while keeping their tuition costs affordable to most working families. While campaigning for the budget to continue aid at the level Evers has requested over the next two years, advocates have said that alone will not solve that dilemma.