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The Impact of the Seven-Year Freeze of Child Care Payment Rates

The 2012 child care market survey made available recently shows the impact of frozen child care payment rates in the Wisconsin Shares child care subsidy program. The freeze on child care rates has resulted in payments significantly below market rates after seven years of no increases for child care businesses that serve low-income working families across the state. The freeze has negative mplications for the quality and stability of child care programs, the services children are receiving, and the ability of parents to afford child care.

Our analysis found that that in nearly every county and tribe, child care programs were paid at a low rate compared to the current private child care market. After seven years of frozen rates, the maximum payment rate (rate ceiling) covered only 23% of child care slots on average statewide, according to an analysis of a 2012 child care market rate survey by the Department of Children and Families (DCF). The analysis showed that the maximum rate in 2006, based on a 2005 market rates survey, covered the price of 75% of child care slots, but seven years later, that frozen rate is now estimated to cover the price of only 23% of child care slots.

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