Wisconsin Childcare Providers Face Uncertain Future as Pandemic Funding Ends
A looming financial crisis threatens Wisconsin’s childcare sector as the expiration of pandemic-era funding approaches. The Wisconsin Early Childhood Association has released a report indicating that up to 25% of providers could shut down or reduce their services significantly by the end of the month.
The report highlights the crucial role federal stabilization funds played in maintaining childcare services during the COVID-19 pandemic. These funds were distributed to providers via the state’s Child Care Counts program, preventing a systemic collapse.
In response to the impending end of Child Care Counts, the state launched the Child Care Bridge Payments program in 2025. This initiative aims to support providers with $110 million through June 2026, funded by interest earned on federal pandemic relief funds. However, these payments are smaller than those previously provided under the Child Care Counts program, which had already been halved in 2023.
The stabilization funding has been instrumental in reversing a decade-long decline in licensed early childhood education programs. It enabled providers to expand and retain staff without increasing tuition costs for parents. The report notes that workforce growth was most robust when funding levels were at their peak, with growth slowing as funding diminished.
Despite these challenges, no state legislation has been enacted to make this funding permanent, and the program is set to conclude on June 30. Ruth Schmidt, executive director of the Wisconsin Early Childhood Association, emphasized the need for legislative action to continue these payments. “It literally would take another act of our Legislature to essentially recreate the system through which these direct payments could continue to be used,” she stated. “That entire system basically gets shut down once those final June payments are made.”
The report warns of a future where childcare access becomes increasingly restricted to affluent families, potentially undermining workforce participation and economic stability. Nearly 75% of providers anticipate raising tuition, which could cost families an additional $1,300 to $2,600 annually. Additionally, 25% of providers are considering closing their programs if stabilization payments cease.
Paula Drew, director of early childhood education policy and research for the Wisconsin Early Childhood Association, pointed out that many providers have already increased tuition due to rising operational costs and prior funding cuts. She cautioned that the report might underestimate the economic impact, given current conditions, including high fuel prices and inflation.
“Providers have already been saying, ‘Parents are indicating they can no longer afford to send their kids here. But if we don’t raise tuition, we won’t be able to keep our doors open,’” Drew remarked. “Until permanent funding for the public good that childcare provides comes to Wisconsin, childcare will start to be a luxury item for people that can actually afford it.”
Heather Murray, owner of Arthouse Preschool in Waunakee, shared her experience of raising tuition by 16% since 2022, with plans for an additional 3% hike in June. Despite these measures, two families opted out, with mothers leaving the workforce. Murray expressed concern about the industry’s direction, stating, “Childcare is a public good. It really cannot function on parents’ tuition alone. We’ve been saying that for years. Hopefully, we’re getting to the point where people will listen.”
