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Overregulated Childcare: Wisconsin’s 2023-’25 Biennial Budget and the Path Ahead

Badger Institute

September 18, 2023

Wisconsin’s legislative budget session ended in July 2023 with an increase in childcare funding in the 2023-’25 biennial budget. However, the final budget did not include $340 million requested by Gov. Tony Evers to continue a pandemic-era program offering direct operating assistance to Wisconsin childcare providers. Instead, Republican lawmakers added $42 million in childcare funding to the budget —including a $15 million revolving loan program to help childcare providers operate and $27 million to increase the income eligibility and phase-out rate for recipients of childcare subsidies in Wisconsin. Subsequently, Republican lawmakers have introduced several bills outside of the budget process aimed at providing additional childcare assistance to families and providers, while also reducing regulations to lower childcare costs.

On the surface, the childcare funding fight was about cost. During the budget session, the governor wanted a larger appropriation for childcare funding than the Republican controlled Joint Finance Committee was willing to support. However, as the recently proposed Republican-sponsored bills show, the underlying issues at stake involve the proper role for government and policies that can both lower costs for families and properly regulate childcare in the state. Had Democratic policymakers gotten their way, the state would have taken a much larger financial stake in the day-to-day operations of childcare services in Wisconsin while maintaining a regulatory framework that drives up costs for families without much evidence of effectiveness. Alternatively, Republicans added funds to the budget to help families afford care, while later offering a series of bills aimed at lowering costs for families.

The Legislature appears ready to confront one of the primary factors driving up childcare costs in Wisconsin: overregulation. Failing to confront this reality would miss an opportunity to improve the affordability and accessibility of childcare without adding to the budget. Eliminating unnecessary or unverifiable regulations can reduce compliance costs for childcare providers without sacrificing quality — savings that they can pass on to families. Fewer regulations will increase competition among childcare providers, return authority to parents and ultimately make childcare more affordable for Wisconsin families.