New DCF Ops Memo Outlines Switch to Attendance-Based Payment for Wisconsin Shares

The Department of Children and Families just released an operations memo dated 8/11/11 on the subject "Authorizations to Licensed Family Providers to be Attendance Based Only". "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. Under their new authority granted by the 2011-13 Budget, DCF has decided to implement this cost cutting (or cost shifting) measure that 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 7-8% 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 (this is bad public policy for ALL providers).
• The WI 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 3-5 percent per year, but Wisconsin Shares reimbursement rates have now been frozen for over 5 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.

A large percentage of Wisconsin’s young children in poverty or close to poverty are in child care settings that receive subsidy payments. These are the same children that are potentially at risk of not being ready for school. We hope that Wisconsin can find a way to assure that Wisconsin Shares remains a strong program providing an essential support to low-income working parents and a solid start for their children. Changing to an attendance only system is taking us in the wrong direction.

For another angle on the problems with the policy change, see the WI Budget Project's blog post on the issue.

Daithi Wolfe