Wisconsin sales and use taxes wouldn’t apply to strollers, diapers and other child care products under a GOP measure reintroduced on Monday, just over a month after it was initially proposed as a provision in the state’s two-year spending plan.
The reintroduction of the measure comes weeks after the Republican-controlled Legislature passed a budget that didn’t include the proposal or $340 million in Democratic proposals to subsidize child care.
The sales tax exemption for the products would save parents $37 million in the next two years, draft bill author Rep. David Steffen, R-Green Bay, said in a statement.
In a memo to fellow legislators, Steffen and co-author Sen. Jesse James, R-Altoona, called the proposal “a creative solution to help reduce the financial stress on young families and demonstrates our state’s commitment to prioritizing the most vulnerable Wisconsinites.”
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Steffen
Steffen initially released the proposal in June, when the Legislature’s finance committee was still writing the state’s 2023-25 budget.
“The proposal didn’t make it into the budget due to the volume of text within it,” Steffen spokesperson Nicole Walentowski-Domokos said.
“We are certainly hopeful that the proposal will continue working its way through the process, but it is in the very early stages of circulation, so it’s just too soon to give any definitive answers,” she said.
The sales and use tax exemptions would apply to baby cribs, playpens, safety gates, baby monitors, child safety cabinet locks, electrical outlet safety covers, strollers, bicycle child carrier seats and trailers, baby exercisers and swings, breast pumps, baby bottles, diapers, baby wipes, and changing tables, according to the draft bill.
James
The economic impacts of the proposal could be significant because parents typically buy baby items right before and right after birth, which is around the time that parental income falls the most, said Jessica Pac, a UW-Madison assistant social work professor.
“If you spend $100 per month just on diapers, and you remove this 5% sales tax, that would be $5 per month, which alone amounts to $60 per year,” Pac said. “But then when you consider all the items covered in the proposal that are purchased in the same time period, it would modestly offset expenses in the first few years of life.”
Assembly Minority Leader Rep. Greta Neubauer, D-Racine, is still reviewing the proposal, spokesperson Adam Wigger said.
Care subsidies rejected
Along with not including Steffen’s proposal in the state budget that Democratic Gov. Tony Evers signed in July, GOP legislators also rejected the governor’s request for $340 million to maintain a child care assistance program that will run out of federal funding next year.
The money would have gone toward monthly payments to child care providers in Wisconsin, making the program permanent.
Evers and Democratic lawmakers raised concerns that rejecting the $340 million subsidy could have a drastic negative impact on the availability of affordable child care in the state.
The biggest costs for families when they have young children is housing and child care, so subsidizing those items would substantially impact the family budget, Pac said, adding that subsidizing those costs wouldn’t provide as much flexibility as unconditional cash transfers, such as the payments remitted in 2021 as part of the expanded child tax credit.
“But I think all of these ideas like removing a sales tax and subsidizing child care are obviously a really good place to start, especially because they’re focused on this time period when child development is very sensitive to parental investments,” she said.
Just over 63% of Wisconsin child care centers have staffing shortages and 80% of workers are facing burnout and exhaustion, a recent national survey of early childhood educators found. Conducted by the National Association for the Education of Young Children, the survey also indicated that 32% of child care center owners would consider leaving their job or closing their program if economic conditions don’t improve.
The child advocacy organization Kids Forward noted that the median pay for child care workers in Wisconsin is $12.66 an hour. Before the federal funding was provided, the median pay was $10.66 an hour, said Brooke Skidmore, co-owner of the Growing Tree, a home-centered child care center in New Glarus.
The federal government originally provided more than $300 million to the Child Care Counts program to support providers during the COVID-19 pandemic by helping cover costs of staffing and operations. That funding dropped to $90 million in June and it will end entirely next year.
The Child Care Counts program has distributed funds to more than 4,300 child care providers in the state, helping more than 22,000 child care professionals, according to the state Department of Children and Families.
About 1 in 3 child care workers are going hungry
About 1 in 3 child care workers are going hungry
Of the nearly 1 million child care workers in the United States, my colleagues and I found in a recent white paper that 31.2%—basically one out of every three—experienced food insecurity in 2020, the latest year for which we analyzed data. Food insecurity means there is a lack of consistent access to enough food. This rate of food insecurity is anywhere from eight to 20 percentage points higher than the national average.
In Washington and Texas, one study found 42% of child care workers experienced food insecurity, with 20% of child care workers experiencing very high food insecurity. High food insecurity is when a person reports reduced quality and variety of diet. Very high food insecurity occurs when a person reports disrupted eating patterns and reduced food intake.
Another study in Arkansas found that 40% of child care workers experienced food insecurity.
Effects of food insecurity
People who are food insecure are at increased chances of being in poor health, with conditions like hypertension, diabetes, asthma, arthritis, and depression, among other chronic diseases and health conditions.
Low wages and food insecurity may contribute to child care workers’ high stress levels. When child care workers experience stress, they tend to reduce the amount of positive attention to children and increase their punitive responses to children’s challenging behavior.
Causes of food insecurity
Overall, child care workers’ wages are low, with the median hourly wage being $12.24 per hour. This means child care workers make little more than fast-food workers, whose median pay is $11.64 per hour. What child care workers make is not considered a living wage.
Low wages meant more than 53% of child care workers from 2014 to 2016 received public assistance, including Medicaid, the Children’s Health Insurance Program, and Supplemental Nutrition Assistance Program. This compares with the 21% of elementary and middle school teachers who received public assistance in that period. When so many child care workers rely on public assistance, it reveals how many of them don’t make enough money to get by.
Nearly all U.S. child care workers are women, and half are people of color. This workforce is central to providing high-quality early childhood education to children up to 5 years old.
Early childhood researchers and policymakers have focused on increasing the education and training of the child care workforce to bolster quality. The Center for the Study of Child Care Employment recommends that lead teachers, the primary teachers in early childhood classrooms who are responsible for the day-to-day management of a classroom, at least have a bachelor’s degree and that assistant teachers at least have a child development associate certificate or equivalent. Despite the fact that the more education child care workers have the higher-quality care they deliver, many states require only a high school diploma or equivalent, and some states do not have any education requirements for entry-level positions.
On average, child care workers who have a bachelor’s degree do make more than those who don’t. However, going to college doesn’t pay off as much for child care workers as it does for those in other fields. Child care workers with a bachelor’s degree average $14.70 per hour, which is just under half the average earnings overall of those with a bachelor’s degree—$27 per hour.
It’s one thing to expect child care workers to get more education to become better at what they do. But it is also important to ensure that additional education pays off.
Policymakers have recently focused on child care workers’ wages. For example, the Build Back Better legislation would raise payment rates to meet the cost of care for children from birth to 5 years old. The cost of care would include wages.
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