Wisconsin Council 40
LEGISLATIVE ALERT
AFSCME Green Sheet
Wisconsin Shares - Child Care Subsidies

www.afscmecouncil40.org
 

August 15, 2008                                                                       Volume #30, Issue #25

Under legislation creating Wisconsin Works (W-2), the state’s welfare reform effort in 1995, the child care subsidy program, Wisconsin Shares, was established. The program, operated by the Department of Workforce Development (DWD) in the past and now under the new Department for Children and Families (DCF), is run through local W-2 agencies and county human and social services departments.

Under the program, the state subsidizes the cost of child care for qualified families by making payments directly to the child care provider chosen by the parent. The parent is also supposed to contribute to the cost of child care. The parent's co-pay amount is based on income, family size, the type of child care selected and the number of children in care.

Eligibility for the child care subsidy program is limited to families with gross income of no more than 185% of the federal poverty level. Once eligible, families retain eligibility until gross income exceeds 200% of poverty for two consecutive months.

Shares was considered a critical aspect for success under W-2. In order for the reforms of W-2 to succeed, and people to obtain and keep gainful employment, it was determined that parents needed reliable child care while they were at work or receiving training under the program. The legislature, and later the federal government as part of the federal welfare reforms of the 90’s, pledged to ensure adequate funding for child care subsidies to make the back to work welfare programs a success. For the early implementation of the program this occurred. Times, however, have changed.

During the last budget cycle, citing shortages in federal dollars and climbing enrollments, DWD offered a series of administrative rule changes designed to fill a $69 million shortfall in Shares. Of these proposals $48 million fell directly on the shoulders of child care providers who provided services to families enrolled in the Shares program.

One measure, dubbed the attendance based pay policy, would have retroactively reduced payments for child care providers if the parent failed to bring their child in for care over a certain percentage of the time for which they were approved. Since licensed and certified providers are limited in the number of children they can care for, providers would have lost payments for time they had set aside in their program for that child, with no way to recover the costs.

Another measure would have increased co-payments for families participating in the program. In theory, this would have required families to offset more of the cost of the care their children receive, saving the state money. In practice, this results in a substantial financial loss for providers, as many absorb the co-payments that Shares families simply cannot afford to pay in the first place. Increasing co-payments essentially results in a rate cut for Shares providers.

These two rule changes were on top of another administrative rule that is now in effect freezing reimbursement rates for providers participating in Shares at 2006 levels. Under that administrative rule, in response to the tight fiscal conditions faced by the state, DWD determined providers will be reimbursed at 2006 levels through the 2008-09 biennia.

AFSCME, along with our early learning coalition partners, lobbied the legislature and the Governor, to eliminate the harmful policies proposed by DWD and fully fund the Shares program. By the time the state budget was passed in October 2007, the $69 million shortfall was filled with general purpose revenue (GPR), and the punitive rule changes, which had been temporarily enacted by DWD under their emergency rule powers, were lifted.

However, due to greater than projected enrollment, the Shares program found itself once again under funded by January 2008, just a few short months after passage of the budget. This time the shortfall was $18 million. Once again, DWD used their emergency rule authority to implement the attendance policy. During the budget adjustment bill AFSCME mounted another successful grassroots lobbying effort to fund the shortfall with GPR dollars, and end DWD’s rule changes.

AFSCME, and our newly organized child care providers, are working with the new Department of Children and Families to find other solutions to the challenges of funding the Wisconsin Shares program. It is important to remember that Shares is a very successful program that allows parents to maintain employment, or obtain training allowing them to remain contributing members of Wisconsin’s economy. Without Shares, many of these parents would be unable to find care for their children while working, and would end up relying entirely on state aid, drawing down on state resources significantly. Compared to this scenario, Shares is a small investment, one very important to the economic vitality of Wisconsin and the overall health of the state budget.

This fall, when talking to candidates for state office, AFSCME encourages members to ask them to commit to fully funding Wisconsin Shares in the next budget. Also ask for their commitment to oppose implementation of the types of rules offered by DWD last legislative session. They should know that the responsibility to balance the books in the Shares programs lies with elected officials, not the people providing child care for families across Wisconsin. Let them know that AFSCME is working to bring in more federal dollars to the program, but that we need their commitment to support this vital program in the next budget.
 

For more information call the AFSCME Area Office at 608-836-6666.