Idaho Child Care Program Faces $16 Million Deficit as Bureaucrats Overextend Benefits
Projections show that the Idaho Child Care Program (ICCP) is facing a nearly $16 million budget deficit due to bureaucrats expanding eligibility and overpaying benefits. As conservatives respond with cuts, more durable solutions require covering gaps in accountability and restructuring child care entitlements altogether.
In a letter to the budget committee, Alex Adams, the director of the Idaho Department of Health and Welfare (IDHW), warned that the ICCP will grossly exceed its budget without a course correction. He noted that “the combination of increased local market rates, paying at a higher percentile of local market rates, reduced copayments for families, and increased eligibility has created a forecasted budget deficit.”
IDHW projects a $15.5 million deficit in the current fiscal year, which is expected to rise to $22.2 million next year. This represents roughly 29 percent and 39 percent more spending on benefits than originally anticipated. This deficit is in spite of a $10.3 million increase in benefits spending the program already received this year.
When overages occur, it is rare for bureaucrats to reduce the size of programs to stay within the confines of their appropriations. It appears the IDHW originally planned to squeeze legislators—and by extension, taxpayers—for the additional funding.
As the newly installed IDHW director, Adams is resisting the status quo by reducing the size of the ICCP to stay on budget. This includes ensuring benefits go to the truly needy, pausing new enrollment, and covering a more reasonable share of the market.Â
The ICCP was originally designed to provide child care support for low-income, working families with children under 13. These federally funded subsidies may help reduce the costs of child care for eligible families.
Child care prices continue to rise faster than inflation, burdening families across America. Adams’ letter noted these costs rose by 25 percent in the Gem State over just three years.Â
Yet, this program itself may be partially to blame for these rising costs. Federal requirements mandate that ICCP benefits be tied to the market price of child care. This model contains perverse incentives: When providers know that government payments are based on surveys of their prices, they are incentivized to raise prices to garner more funds—regardless of the real operating costs or value.
Increased costs are far from the only driver of the program’s funding deficit. The program’s benefits became increasingly generous in recent years, covering people with higher incomes and more expensive child care providers while reducing beneficiaries’ copayments.
Federal rules allow the IDHW to de
Article from Latest
The Reason Magazine website is a go-to destination for libertarians seeking cogent analysis, investigative reporting, and thought-provoking commentary. Championing the principles of individual freedom, limited government, and free markets, the site offers a diverse range of articles, videos, and podcasts that challenge conventional wisdom and advocate for libertarian solutions. Whether you’re interested in politics, culture, or technology, Reason provides a unique lens that prioritizes liberty and rational discourse. It’s an essential resource for those who value critical thinking and nuanced debate in the pursuit of a freer society.