Here's what we know about the newly proposed Child Care Stabilization Act
Just weeks before federal child care pandemic relief funding is set to run out, federal lawmakers introduced the Child Care Stabilization Act — which proponents say would keep millions of children in care.
The act would continue the Child Care Stabilization Grant Program, which was created under the American Rescue Plan Act of 2021 to keep child care providers afloat during the pandemic. The $24 billion that Congress devoted to the program is set to run out Sept. 30.
According to a report from The Century Foundation, the nation will face "dire consequences" if the federal government does not take action. Wisconsin, the report found, is no exception.
Here's are the answers to some common questions about this proposed legislation:
What exactly does the Child Care Stabilization Act propose?
If approved, the Child Care Stabilization Act would provide $16 billion each year for the next five years to continue the Child Care Stabilization Grant Program. This amounts to $80 billion being funneled to the child care industry.
The bill language said it would continue a stable source of funding to help offset operating costs without having to drastically increase tuition, sustain and increase wages and ultimately expand the capacity and supply of child care providers. It would also support access to child care services that can be particularly hard to find, including infant care and child care for children with disabilities.
The bill said funding will be allocated to states the same way as stabilization funds from the American Rescue Plan. As of now, there is not an exact projection of how much Wisconsin would receive if the legislation were to pass.
How did the pandemic relief funds help Wisconsin?
Wisconsin used Child Care Stabilization Grant Program dollars, along with other federal COVID-19 relief money, to help fund its Child Care Counts program. Child Care Counts has undergone several iterations since its inception in May 2020; the current version distributes stabilization payments to providers on a monthly basis.
According to the Wisconsin Department of Children and Families, over $650 million has gone to 5,080 providers between May 2020 and August 2023 via Child Care Counts funding.
Child care providers previously told the USA TODAY NETWORK-WISCONSIN that Child Care Counts prevented steep tuition hikes during the pandemic, allowed providers to hire extra help, increase staff wages, make long put-off center improvements and keep their doors open.
With Child Care Counts funding set to sunset in early 2024, providers face an uncertain future, and with funding petering out, some are already getting a taste of what it's like to lose this revenue source.
The Wisconsin Department of Children and Families administers Child Care Counts. Its communications director, Gina Paige, said if the Child Care Stabilization Act passes, proposals would need to be submitted to the state Joint Committee on Finance over how to use the funds. Paige said DCF could not comment on what a possible proposal would entail at this time.
How did pandemic relief funds help the child care industry nationwide?
Child care stabilization grants have kept millions of children in care, according to a report from the U.S. Senate Committee on Health, Education, Labor and Pensions.
A fall 2022 survey from the National Association For Young Children found 35% of providers surveyed credit stabilization funds with keeping their businesses open. The report from the U.S. Senate Committee on Health, Education, Labor and Pensions said the Child Care Stabilization Grant Program kept 220,000 child care providers afloat, enabling many parents and guardians to remain in the workforce knowing their children are being taken care of during the day.
What's at stake?
The Century Foundation Report estimated more than 3 million children nationwide will lose access to child care and 70,000 child care programs will close if Congress does not continue child care investment.
Between parents leaving the workforce or reducing their hours due to child care woes, families would see $9 billion in lost earnings each year, the report calculated. It also said that when considering the loss in tax and business revenue, states stand to lose $10.6 billion in economic activity annually.
In Wisconsin alone, The Century Foundation estimates over 2,100 child care programs would close, leaving over 87,000 children without care. Parents leaving the workforce as a result would cost Wisconsin more than $232 million in parental wages, the report concluded.
Those who could still access care would likely find it more expensive; over half of Wisconsin providers responding to the fall 2022 NAEYC survey said they will need to raise their rates when stabilization grants end. The staffing shortages the child care industry is currently facing are also expected to worsen, as the survey found over 33% of Wisconsin providers expect to have to decrease employee compensation. Child care is already a notoriously low-paid field.
U.S. Sen. Tammy Baldwin (D-Wisconsin), a bill sponsor, said in a press release, "We must pass this legislation to lower costs for working families, help Wisconsin businesses meet the demand for workers and grow our economy."
What's next?
The bill was introduced in both the Senate and House of Representatives last week.
Rep. Gwen Moore (D-Wisconsin) and Congressman Mark Pocan (D-Wisconsin) sponsored the legislation in the House.
"The bill’s sponsors are working to move the legislation forward as quickly as possible to address the coming deadline at the end of September," said Baldwin's office.
Madison Lammert covers child care and early education across Wisconsin as a Report for America corps member based at The Appleton Post-Crescent. To contact her, email mlammert@gannett.com or call 920-993-7108. Please consider supporting journalism that informs our democracy with a tax-deductible gift to Report for America.
This article originally appeared on Appleton Post-Crescent: Here's what we know about the proposed Child Care Stabilization Act
