Executive summary

While parents play the most important role in early childhood development, having reliable and affordable childcare is another crucial component to helping working families thrive. This chapter explains the current childcare landscape in Wisconsin, assesses policy changes in the 2025-27 biennial budget, and offers a path forward for the next governor and the Legislature.

Key findings:

• In an effort to reduce childcare costs for families, policymakers often advocate for increased subsidies to providers or families. However, the effectiveness of this approach is undermined by evidence showing government assistance, including childcare funding, was a major driver of inflation in recent years, given its impact on consumer demand.
• While Wisconsin’s policymakers responded to rising costs through programs such as Child Care Counts and Wisconsin Shares subsidy increases, these program expansions likely made families no better off financially, given such high overall inflation.
• The childcare sector is also highly regulated. Many regulations increase childcare costs with little evidence of a positive impact on program quality.
• The biennial 2025-27 budget made substantial changes to childcare policy in Wisconsin, including reducing staffing requirements and giving more operating flexibility to family care providers.

Recommendations:

• Policymakers should pursue additional regulatory changes that make it easier for informal and family care providers to operate.
• The state government can also help address affordability by creating alternative assistance options such as education savings accounts.
• Wisconsin’s Legislature should mandate a thorough study of existing childcare regulations to assess the cost and benefit of those regulations.
• The next governor and the Legislature should review the YoungStar quality review system of providers to assess the effects on availability and affordability. This review should consider fundamental reforms to the rating system aimed at supporting quality while making care more affordable.
• Rather than limiting assistance to a defined set of providers as current policy does, policymakers could explore account-based models that give families greater flexibility over childcare spending. Existing examples, such as Arizona’s Empowerment Scholarship Accounts or Florida’s education choice programs, show how public funding can be structured around family choice rather than provider-specific subsidies.