Gov. Tony Evers has vetoed legislation that would have broadened a tax credit for businesses that invested in child care services.
A “catch-all” provision in the bill would have awarded the tax credit for “any other cost or expense incurred due to a benefit provided by an employer to facilitate the provision or utilization by employees of child care services.”
The provision “invites the possibility of a business claiming various expenses only tangentially related to child care services,” Evers wrote in his veto message, signed Friday. He added that it “significantly increases the risk of fraud” and didn’t including funding to cover the increased costs for the Wisconsin Economic Development Corp. to ensure against employers scamming the system.
Republican lawmakers introduced the legislation, SB 291 / AB 283, in 2025 as the Evers administration and child care advocates were seeking up to $480 million in the Wisconsin 2025-27 state budget to support child care workers’ wages and avert increased child care tuition for families. The final budget included about $110 million for direct payments that expire this summer.
The GOP measure proposed expanding the state’s Business Development Tax Credit, which since 2023 has allowed employers to get a tax credit for 15% of the capital expenditures they make for child care facilities for their employees. The original tax credit had no takers.
Child care providers were critical of the expansion proposal and argued that that it wasn’t adequate to address increased costs and reduced capacity for child care in Wisconsin.
The measure passed the Senate in November 2025 on a 19-14 vote with all but one Democrat voting against it. The Assembly concurred with the Senate bill on a 63-31 vote in February, with nine Democrats joining the GOP in favor of the bill.
In his veto message, Evers noted that he signed a bill in December, permitting employers to take the tax credit if they invest in a third party that establishes a child care program or in a revolving loan fund for that purpose. That measure, 2025 Act 78, was an example of “making smart and strategic modifications” Evers wrote.
“Unfortunately , this bill fails to do the same,” he wrote. “I am vetoing this bill in its entirety because I object to the Legislature making drastic and vague expansions to tax incentive programs without providing the necessary funding for proper implementation and the clarity necessary to prevent fraud, waste, and abuse.”
