When July began, childcare providers across Wisconsin entered a new financial reality. The Child Care Bridge Payments Program, which supplied monthly stabilization funding to providers throughout the state, expired on June 30 with no permanent replacement in place.
From Pandemic Relief to a Statewide Funding Cliff
The program represented the final extension of assistance that began during the COVID-19 pandemic. Through the federally funded Child Care Counts program, Wisconsin distributed monthly payments to help childcare providers remain open, retain employees and manage increasing operating expenses. The Wisconsin Early Childhood Association reports that the funding supported 5,762 programs, 75,740 early childhood educators and more than 430,000 children.
Federal funding for Child Care Counts ended in June 2025 after being reduced by half in 2023. Wisconsin then allocated approximately $110 million for the Child Care Bridge Payments Program, using interest earned on federal pandemic-relief funding to continue smaller monthly payments for one additional year. That temporary support ended in June 2026.
For many providers, the payments had become an important part of maintaining daily operations. Centers used the funding to improve employee wages, provide bonuses, purchase classroom materials and absorb rising costs without passing the full financial burden on to families.
Now, providers must determine how to replace that revenue or reduce their expenses.
Providers Consider Closures, Tuition Increases and Service Reductions
A report from the Wisconsin Early Childhood Association found that one in four Wisconsin providers considered themselves somewhat, very or extremely likely to close after stabilization payments ended. More than one-third expected to reduce their hours, while nearly three-quarters anticipated raising tuition. Those tuition increases could cost families an additional $1,300 to $2,600 annually.
The effects are expected to vary among providers. Some are considering tuition increases, reduced operating hours or wage freezes. Others may eliminate employee bonuses, reduce staffing or close classrooms. Because childcare centers must maintain specific staff-to-child ratios, losing employees can reduce the number of children a provider is legally able to serve, even when space is available.
Wisconsin was already experiencing a shortage of childcare capacity before the bridge payments expired. A 2024 study from the University of Wisconsin–Madison found that staffing barriers prevented providers from filling approximately 33,000 potential childcare openings across the state. The study also found that 90% of providers affected by the 2023 funding reduction reported a change in their ability to offer competitive compensation, while 81% reported difficulty hiring new employees.
Milwaukee County Childcare Centers Face Growing Pressure
The situation is particularly concerning in Milwaukee County, where nearly 1,400 child care providers received stabilization support. According to a 2025 study from UW–Madison’s Institute for Research on Poverty, approximately one in five Milwaukee County providers expected to close without continued assistance. Thirty-nine percent anticipated raising tuition, while 44% predicted that their waiting lists would grow.
Daniel Balderas, an FCI borrower who owns two PaPa Bear Daycare centers in Milwaukee, used stabilization payments to support employees through bonuses, meals and other benefits. Balderas said he expects to keep his centers open, but the loss of funding will affect his operating margin and make it more difficult to provide raises to employees.
Other Milwaukee providers are confronting similar decisions.
Wisconsin Families Already Face Rising Childcare Costs
The funding ended as families were already facing rapidly rising childcare expenses. Wisconsin’s 2026 Market Rate Survey found that full-time infant care now costs an average of $17,400 annually at child care centers and $13,000 through family-based providers. Monthly infant tuition increased by an average of 8% at centers and 13% at family-based programs.
Wisconsin has continued investing in other child care initiatives, including $123 million to increase Wisconsin Shares subsidy rates for qualifying families and $66 million for a new preschool program serving 4-year-olds. However, those investments do not replace the flexible monthly payments providers used for staffing and operating expenses.
Impact on FCI Borrowers and How You Can Help
The full effect of the funding expiration will likely become clearer throughout the summer and fall as providers finalize their budgets, tuition and staffing decisions. For Wisconsin families, the outcome could mean higher costs, fewer available openings, longer waiting lists and reduced access to the child care they depend on to remain in the workforce.
FCI is working closely with our childcare borrowers, all of whom are affected in some way by this funding disruption. We are providing flexibility where we can, connecting providers with resources, and listening to what they need most. Their most consistent request was simple: help raise awareness and let people know they are still open for business. The following FCI borrowers are continuing to work hard to find ways to best serve children and families in their communities:
- Trasnos Bilingual Childcare Center – Middleton, WI
- Jo’s Learning Academy – Milwaukee, WI
- Community Coordinated Child Care (4-C) – Madison, WI
- Happy Bear Childcare – Milwaukee, WI
- Building Blocks Childcare – Oxford, WI
Access to quality early childcare is absolutely essential to the economic stability and vitality of our communities. If you are looking for ways to help, please consider contacting childcare providers in your community to ask what they need most. Some may welcome financial contributions, supplies or other in-kind support.
If you are interested in learning more about our work across Wisconsin, please visit www.forwardci.org/our-impact