Wisconsin parents face daycare price increases as federal funding expires

(FOX 9) - With a massive childcare funding program set to expire in the coming days, early learning centers across the United States are warning of rising prices and permanent closures. In the upper Midwest, the impact varies by state as the response by lawmakers in Minnesota varies greatly from that of Wisconsin.

In Minnesota, Governor Tim Walz along with the Democrat-controlled legislature passed legislation that essentially extends the pandemic-era federal funding known as the Childcare Stabilization grant program.

Notably, Minnesota will spend $316 million next year alone on a compensation support payments program, which will supplement childcare worker pay as centers struggle to hire, retain, and pay competitive wages.

In Wisconsin, on the other hand, the Republican-controlled state assembly has declined to act on childcare funding measures which means support programs will run dry by January 2024.

"We’re all very, very concerned that we’re going to be facing some very dire consequences," said Ruth Schmidt of the Wisconsin Early Childhood Association (WECA). " All told, it's going to be catastrophic for families."

Out of more than 500 centers surveyed by WECA, 90 percent said they’ll have to raise rates while 30 percent said they’ll consider closing altogether.

"We’re so lucky to be in Minnesota," said Desiree Culhan who manages a New Horizons childcare center in Apple Valley. "I think a lot of centers were very scared they would have to raise their rates for parents."

Culhan said workforce challenges have become their biggest operational hurdle, as childcare centers nationwide say employees are leaving the field for higher-paying jobs. Culhan said without state assistance, the only option would be to raise rates – something they don’t want to do.

"[Our employees] have kids at home to feed, the cost of living has gone up, everything’s increased but we’re trying to make daycare as manageable as possible - and a lot of our families here are working middle-class families."

In Wisconsin last month, Governor Tony Evers called the legislature into a special session to address these workforce challenges, and while the session remains open, action has yet to take place on childcare.

"What we sometimes hear from legislators is let’s let the market work itself out. The market of childcare won’t work itself out," said Schmidt.