Idaho halts accepting new families after $15M budget shortfall in childcare grant program

A child care program for low-income children in Idaho faces a $15.5 million budget shortfall this year, after the state expanded eligibility and reduced what families are required to pay each month while day care costs rose, according to the Health and Welfare Department.

The deficit has prompted state health officials to temporarily stop accepting many new families into the Idaho Child Care Program, which partially covers child care costs for low-income families with working parents, Health and Welfare Director Alex Adams said at a news conference Tuesday. The anticipated shortfall is more than 29% of the program’s overall budget for this fiscal year, which ends in June 2025. 

Without any changes, that deficit could grow to $22 million in the following fiscal year, he said, though both numbers are worst-case scenarios. Nearly 8,100 kids are enrolled in the program this year. 

”We know that we’re in the red, which is why we’re taking action here in August, so that by the time the Legislature rolls around, there’s a robust conversation about where we go from here,” Adams said. 

To cut down on costs, the department plans to temporarily pause admitting many new families that apply to the program; lower the income threshold to reduce the number of people who can qualify for the program; and delay paying higher rates to day care centers for several months, according to an Aug. 14 letter Adams wrote to lawmakers on the legislative budget committee, which the agency shared with the Idaho Statesman. Those changes are expected to keep the program within its budget in the coming months.

The misstep, which predates Adams, is expected to prompt another legislative review next year at an agency already facing scrutiny over how it spends taxpayer money.