In June of this year, as part of the 2011-2013 budget process, the Wisconsin Legislature ceded its decision-making power and oversight regarding the $300 million a year Wisconsin Shares program to the Department of Children and Families (DCF). Wisconsin Shares is the state child care subsidy system that funds children of low-income working parents to attend state licensed (or county certified) child care programs while their parents are at work. It currently serves about 56,000 children in both group centers and family child care homes. In the past, this legislative authority governed rulemaking and other major policy changes at the department level. It also meant that there was always a hearing, written testimony, fiscal bureau analysis, an opportunity for constituents to voice their opinions, and then a legislative vote on the public record in order to make these kinds of significant alterations.

Specifically, the 2011 Wisconsin Act 32 (Biennial Budget Act) authorized DCF to reduce costs in any of the following ways:

• Implement a waiting list
• Increase family co-payments
• Adjust provider reimbursement rates
• Adjust income eligibility levels

It did not take long for DCF Secretary Eloise Anderson to exercise her new powers. In an operations memo dated August 11 (and not made public until a week later), the department announced that as of August 28, licensed family providers would move to attendance-based-only authorizations. This change undoes 14 years of enrollment-based reimbursements.

What's the Difference?

"Attendance-based" means payment is based solely on hours attended, unlike private child care, Head Start, and public and choice schools, where everything is enrollment based--i.e. payment is for a slot, regardless of whether the child is absent on any given day. DCF has decided to implement this cost-shifting measure, which amounts to a substantial financial hit to family child care providers who are part of Wisconsin Shares. This comes on top of inadequate reimbursement rates that remain frozen at 2005 levels and have already negatively impacted the quality and availability of care for Wisconsin's low-income working families.

There are several problems with this policy change:

• Attendance-based-only payments unfairly punish family providers who care for Shares children with an immediate 5-7% compensation cut (based on average attendance figures).
• In licensed child care, payments should mirror the market, where payments are made based on child enrollment, not on hours attended.
• If the payment system does not provide fair, reasonable reimbursement to providers, many providers will choose not to serve low-income families.
• DCF is exercising their authority unilaterally, with no input from legislators, consumers, providers, or experts in the field.
• It is extremely unfair to only apply this policy to family providers (and is bad public policy for ALL providers).
• The Wisconsin Shares program is actually UNDER budget, so there should be no immediate need for cost saving measures.

 
Prices in the child care market have generally risen 2-4% per year, but Wisconsin Shares reimbursement rates have now been frozen for over five years. If payment rates do not reflect cost increases, programs will have to absorb the difference, or pass the additional cost on to already struggling low-income families. This ongoing trend is likely to mean less access for families and lower quality child care for their children, as well as financial hardship for a fragile child care industry, where the average teacher earns only about $11.00 per hour. [ See http://www.wccf.org/pdf/pathways_three_childcare_workforce.pdf]

Advocacy

Late August was a busy time for early education advocates across the state. WCCF and the Wisconsin Budget Project both blogged on the issue. The Early Learning Coalition (ELC) sent a letter to the DCF Secretary (and cc'ed to the Governor) expressing strong objections. Joan Mrkvicka, an accredited family child care provider with over 20 years of experience, wrote a letter to the Governor as well. She warned that, "I will be forced to fill most of my slots with well paying customers that I can count on to fulfill my budget needs.  Unfortunately, it will not be worth the trouble for me to do all the work required to continue taking in Wisconsin Shares children."  John Grabel, of AFSCME Council 11, which represents Wisconsin family child-care providers, penned an op-ed in the Milwaukee Journal-Sentinel arguing that "Walker policies will force providers out of business." WCCF also sent out an action alert which resulted in almost 100 emails to Gov. Walker and Sec. Anderson requesting that the new policy be overturned.

There was also advocacy on behalf of the "cost-saving measure." DCF Secretary Eloise Anderson also had an op-ed in the MJS in which she called the new policy simply a "modest change." She goes on to mention that it will save almost $4 million dollars and will cost providers $32 per month per child on subsidy. This could amount to a $3000 reduction for a family child care provider! The Journal-Sentinel's editorial board had also earlier weighed in on the side of the department's decision, focusing most of their attention on fraud in the system. They called the drastic changes to the payment policy "a reasonable move."

Legality

Rep. Tamara Grigsby of Milwaukee asked the Wisconsin Legislative Council to look at whether DCF's actions actually followed the law. They responded with a lengthy memo that basically argues that the changes should have been promulgated as an administrative rule. The Department has not responded to this legal assessment. The Early Learning Coalition has a meeting with the Deputy Secretary on October 14 at which this and other issues will be discussed. Of biggest concern at this point is that DCF has hinted that they next plan to extend the attendance-based only policy to ALL licensed group centers as well.

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