(The Center Square) – There is a warning about pros and cons of public funding for child care in Wisconsin.
The Wisconsin Policy Forum recently said lawmakers must be keenly aware of the “tradeoffs” that come with promising more taxpayer money for day care and other child care centers.
“With child care in Wisconsin already drawing heavily from federal funding, state sources may offer more opportunities for expanding child care revenue, albeit with important policy and political considerations,” the Policy Forum report stated. “Wisconsin could choose to increase the allocation of its current state general purpose revenue, or GPR, to child care, without a new dedicated funding source or increase in existing GPR sources…As with the federal funding, reallocating existing general fund revenues to child care would incur tradeoffs if it involved cutting elsewhere in the current budget.”
The report notes that Wisconsin already spends millions on child care. The WPF report shows that Wisconsin is ranked 10th in national TANF spending for child care. That price tag comes to $231 million.
Researchers say Wisconsin lawmakers have several options to find new money for childcare, including new sin taxes.
“Louisiana complements its tax on sports wagering with the Early Childhood Education Fund,” the report added. “The state has exercised creativity in its revenue sources; while the tax on sports wagering is the primary contributor, the matching fund also claims 50% of the revenue from sales of NBA Pelicans specialty license plates, surplus revenues from payments from casinos to the state, tax revenue from sales of hemp-derived CBD products.”
The Policy Forum said other options could include:
● An income tax credit to employers
● A child care contribution tax credit
● A child and dependent care income tax credit
“These options vary in their popularity and potential impact,” the report noted in its conclusion. “On one side of the spectrum, tax incentives tend to be more popular and bipartisan but may be underutilized and less impactful as they are typically put forward in other states (although they could be engineered to raise more money). On the other side of the spectrum, additional taxes are rarely popular but can have a large financial impact.”
