It isn’t easy running a childcare center.
But for business owners like Daniel Balderas, who owns two centers, a monthly stabilization payment from the federal government called Child Care Counts was a major help to bring the children on field trips and take care of his employees.
“I’m giving teachers bonuses based on performance, or sometimes it’s random or I see teachers working hard,” Balderas said. “Gifts for teachers’ birthdays, I buy the teachers’ lunches often.”
When those funds dried up last year, the state stepped in to offer one more year of stabilization payments through a Child Care Bridge Payment Program.
Now, Balderas’ daycares are among almost 1,400 childcare centers in Milwaukee that will lose state funding at the end of June.
Without the support, about one in five Milwaukee County childcare providers predict they’ll have to close, 39% will have to raise tuition and another 44% will have longer waitlists, according to a 2025 study from the University of Wisconsin-Madison’s Institute for Research on Poverty.
‘Don’t got the funding anymore’
Balderas’ biggest challenge has been finding and retaining staff.
Balderas, who is also certified as a lead teacher, said he’s lost some great teachers to schools or franchises that offer higher pay he can’t afford to match. As a result, he covers shifts and employees sometimes work between his two childcare centers when they are short staffed.
The number of children a childcare center can legally serve is limited by the number of staff working at that business, even if a facility has the physical space and materials to accommodate more, said Paula Drew, director of Early Care and Education Policy and Research at the Wisconsin Early Childcare Association.
Balderas has not struggled with retention alone. Research from the University of Wisconsin-Madison in 2024 found that about 33,000 potential childcare spots across the state could be filled if staffing barriers were addressed.
Childcare stabilization funding made it easier for providers like Balderas to offer more competitive benefits to retain staff.
But when the federal government cut Child Care Counts funding in half in 2023, Balderas said there were times that the business was merely breaking even as he continued supporting the staff with the reduced funds.
Ninety percent of providers who received Child Care Counts funding before payments were cut in 2023 said the funding cuts changed their ability to offer competitive compensation, and 81% said the payment cuts contributed to changes in their ability to hire new staff, according to the 2024 study.
Balderas said he can keep his business afloat once the state’s childcare stabilization payments end this month, but it will cut into his bottom line and he will have to absorb the losses.
“I can’t tell a teacher that deserves a raise that ‘well, we don’t got the funding anymore, I can’t give you the raise I promised,’” Balderas said.
Subsidy payments may not adjust for tuition increases
With 39% of Milwaukee County childcare providers reporting they will have to raise tuition after childcare stabilization payments end, one of the Wisconsin Early Childhood Association’s biggest concerns for Milwaukee is how the tuition increases will impact families on subsidy.
The Wisconsin Shares Child Care Subsidy Program subsidizes a portion of monthly childcare costs for low-income families, at or above the price of 75% of childcare slots.
Ruth Schmidt, executive director at the Wisconsin Early Childhood Association, said childcare tuition in Milwaukee is already one of the highest in the state, and Wisconsin does not have the ongoing funding to support increased subsidy payments for growing tuition.
Schmidt said she’s concerned that the state subsidy payments will not keep up with rising tuition.
“It will be underfunded as it exists right now,” Schmidt said.
Almost all of Balderas’ families at his two childcare centers receive childcare subsidies.
The state is also paying more toward childcare subsidies than it ever has in the last 24 months. As of March 2026, the state paid $28.4 million in Wisconsin Shares childcare subsidy payments to Milwaukee County families, supporting almost 25,000 children in the county.
Wisconsin did invest in education for 4-year-olds in last year’s budget, Drew said. She anticipates that more providers will turn to serve these ages due to the expenses of providing care for infants and toddlers.
State lags behind with solutions
State Sen. LaTonya Johnson, who represents District 6 on Milwaukee’s North Side, can relate to the challenges of Milwaukee childcare providers.
A former early childhood educator, Johnson transitioned her daycare, open 24 hours, seven days a week, to entirely serve families on subsidies.
“For my kids, that was one of the best things that ever happened to them,” Johnson said. “But for me, by the time I ran for the seat, my house was in foreclosure. I almost lost my house.”
Since the state bridge payments were temporary, Johnson and her colleagues introduced a bill last year to allocate $220 million in childcare stabilization payments for 2025-26 and 2026-27 using federal Child Care Development Funds and Temporary Assistance for Needy Families (TANF) block grants.
The bill also would have provided additional subsidies for childcare providers to cover the costs to care that family subsidies don’t cover.
Johnson said those bills died because Republican colleagues did not give the bills public hearings before the legislative sessions ended.
The Wisconsin Early Childcare Association is watching states like New Mexico, Louisiana and Alaska that are finding new ways to fund childcare on a long-term scale, but the state is falling behind.
“Wisconsin is one of the very few states that does not put state revenue directly into childcare, or didn’t until last year” Schmidt said. “They now do through the 4-year-old program.”
Balderas said there isn’t much other funding for childcare owners like him who take care of toddlers and infants. He said there’s a food program, but “it’s super tedious,” requiring providers to serve certain food with specific portions.
“I try to apply for grants for improving our flooring, painting on the outside, stuff like that,” he said. “There’s really no help.”
Alex Klaus is the education solutions reporter for the Milwaukee Neighborhood News Service and a corps member of Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues and communities. Report for America plays no role in editorial decisions in the NNS newsroom.
Jonathan Aguilar is a visual journalist at Milwaukee Neighborhood News Service who is supported through a partnership between CatchLight Local and Report for America.
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