Weekly Fiscal Facts are provided to Wisconsin Newspaper Association members by the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. The Wisconsin Policy Forum logo can be downloaded here.
As the availability and affordability of child care has become an increasingly pressing issue, most potential options in Wisconsin to generate new child care revenue are available at the state — rather than the local – level.
A recent Wisconsin Policy Forum report examines a range of fiscal strategies available to Wisconsin policymakers to address the rising cost, limited availability, and low wages of child care. It does not advocate for or against any option, or take a position on whether any action is necessary.
Historically, federal dollars have comprised most of Wisconsin’s public child care funding. The state currently assigns a greater share of federal Temporary Assistance for Needy Families (TANF) funding to child care programs than most states, limiting its options to do more.
State general fund dollars make for the most straightforward option for new revenue to fund child care in Wisconsin. This approach may be attractive due to its flexibility, but it also involves tradeoffs with other general fund priorities such as schools, universities, health care, and more.
Wisconsin already has taken its first step to fund a state child care program entirely with state general fund dollars. With a $65 million annual appropriation, the 2025-27 state budget established the new “Get Kids Ready” initiative, which will pay participating child care providers to equip four-year-olds with kindergarten readiness skills.
The report looks at the increasing number of both blue and red states that are adopting new state-level approaches to funding child care. Funding mechanisms include new or increased tax revenues, trust funds or endowments, tax incentives, or cost-sharing programs.
At the local level, school districts are often the public entities best positioned to provide child care services. However, a limiting factor is that Wisconsin law bars many of the revenue-sources available in other states. Still, the report cites examples of Wisconsin school districts that have achieved success in providing child care, including in Frederic and Sauk Prairie.
Our report looks at two additional local options available to districts, the first of which are community service programs. These can serve both adults and children and can include full-day child care programs as well as after-school and summer programs. These programs can be funded through the district’s “Fund 80” property tax levy, which is not subject to state revenue limits. However, raising this levy would increase the overall property taxes paid by district residents.
Pre-kindergarten programs for 4-year-olds already are offered by most districts, with many offering parttime 4K programs. If these were expanded to full-day or five-day-per-week programs, they may serve more children and secure more revenue for the district.
This information is provided to Wisconsin Newspaper Association members as a service of the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. Learn more at wispolicyforum.org.
