An important start in determining what would make good policy is having a clear idea of the challenges that La Crosse County faces, as well as the advantages they have in this area. The current problem description of a “failed economic model of the child care industry, where a simple supply and demand model doesn’t seem to work” seems a simplification of the complex issues at work in the early childhood market, and more broadly, the United States patchwork of social policies.

Breaking this statement down into its component parts could provide La Crosse County with a clearer idea of the specific challenges they may be able to assist with and provide their university partner with manageable project descriptions that can together attack different pieces of this puzzle. Before a problem can be solved, it must be seen clearly and understood. This report aims to provide a starting place for the county as they organize a plan for supporting the healthy development of all children in the county and strengthen the economic engine that is La Crosse.

UniverCity Year Contact Info
Gavin Luter
Managing Director
gavin@cows.org
608-261-1141

There are a number of different ways that La Crosse County could play a role in the childcare crisis. Such roles could include La Crosse County acting as an employer and looking into providing some type of childcare benefit to help attract employees; La Crosse County may act as an economic development organization which could provide incentives and loan or grant programs to specifically assist child care providers; and La Crosse County may also look at the child care crisis from a regulator’s perspective by analyzing whether there are any regulations that the County Board could impact that would make a positive difference in order to make the child care business model work.

There are a number of potential legal questions that surround the regulation of childcare, and although relevant to all three of the above-mentioned methods of how the County could help with the child care crisis, this research will focus on La Crosse County as an employer.

La Crosse County, as an employer, could open a childcare center at Hillview Health Center, a county owned and operated nursing home. Hillview is not at full capacity and has not been for some time. The county may be able to make use of one of the under-utilized wings of the facility by modifying the wing to be a childcare facility. Most likely, the county would contract with an outside provider to operate the daycare facility, but the county would share certain services to make it more operationally efficient.

Some of the main legal issues that the County must be aware of, and that are addressed in this research document, include facility requirements/regulations, shared services agreements, the idea of a parent-cooperation, caregiver incentives, and intergenerational activities.

This research assumes the county childcare center will function as a Licensed Group Child Care center, a program regulated by DCF 251 where a person for less than 24 hours per day provides care and supervision for 9 or more children.

UniverCity Year Contact Info
Gavin Luter
Managing Director
gavin@cows.org
608-261-1141

Some businesses have tried to combat this issue themselves. Gundersen, a hospital in La Crosse, offers free childcare to employees. Their program provides care for children between ages six weeks and 12 years and has a capacity of 101 children total. However, this program is not large enough and many Gundersen employees still struggle with finding childcare. Kwik Trip, another large employer in the area, is planning to open a childcare facility for its employees. Since it hasn’t opened yet, we aren’t aware of how it will impact childcare in La Crosse.

The La Crosse School District and other school districts in the county provide free half-day preschool to 4 year olds. Although this 4k program is great to have in place, there is an issue with transportation since many parents work during the day and cannot pick up or drop off their kid halfway through the workday. Additionally, most of these kids need to be at a childcare center for the other half of their day and many centers prefer not to offer half-day care. Recently, a traveling preschool program, which will be run out of a RV, started in an attempt to reach 4 year olds in the La Crosse School District that cannot attend the regular preschool program provided by the district. If the county decides to expand pre-K to include 3 year olds, childcare centers will likely have to increase their costs. Caring for infants and toddlers is quite expensive, so childcare centers become profitable when they care for 3 and 4 year olds. Obviously, an increase in childcare costs is not ideal because childcare in La Crosse is already very expensive for many families. If pre-K is expanded, it’s important to consider how the county could support childcare centers in the area.

Based on recent census data, La Crosse County has around 5,900 kids under the age of 5. If the county decides to implement universal childcare, this is the number of kids they should account for. No matter how La Crosse decides to go about solving issues related to childcare, this is good to know for cost estimates for their projects.

UniverCity Year Contact Info
Gavin Luter
Managing Director
gavin@cows.org
608-261-1141

La Crosse County’s child care industry faces three primary challenges. First, there is an insufficient number of licensed child care slots available to meet the needs of the county’s families with young children. Second, families with access to child care in La Crosse County are often burdened by the cost of care. Third, child care programs have difficulty retaining and recruiting adequate numbers of staff to meet their full licensed capacity because of low wages.

To address La Crosse County’s child care challenges, we analyzed three alternatives to current policy. Under Alternative 1, La Crosse County would provide grants to incentivize the creation of an employer-assisted child care cooperative. Under Alternative 2, La Crosse County would develop and operate a child care program for use by county employees. Under Alternative 3, La Crosse County would provide grants to child care programs to subsidize staff wages and benefits.

Based on our Monte Carlo simulation, we find negative average net benefits of approximately-$259,000 for the first alternative, with values ranging from -$586,000 to $102,000, approximately -$264,000 for the second alternative, with values ranging from -$591,000 to $97,000, and approximately -$3,717,000 for the third alternative, with values ranging from -$6,359,000 to -$756,000. Accordingly, we recommend La Crosse County consider other policy alternatives to increase the availability and affordability of child care.

Notably, the net benefit estimates would be substantially larger if children from low-income families were targeted under Alternatives 1 and 2. We did not analyze this modification fully; however, it appears that with complete targeting of low-income children, it would be very likely that the first two alternatives would generate positive net benefits. Therefore, this modification to Alternatives 1 and 2 would be worthy of further analysis.

UniverCity Year Contact Info
Gavin Luter
Managing Director
gavin@cows.org
608-261-1141