Bill Description: Senate Bill 1374 would establish a state-administered child-care program, including eligibility rules, provider requirements, oversight, waiting lists, and program administration.
Analyst Note: Senate Bill 1374 codifies a program that already exists in rules. In other words, the program was started without legislative approval, and this bill retroactively seeks approval to lawfully establish the program under the Idaho Department of Health and Welfare (DHW).
Rating: -6
Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government?
Senate Bill 1374 would create Chapter 25, Title 56, Idaho Code, to establish the “Idaho child care program” within the Idaho DHW. Neither the provision nor the funding of child care is within the proper role of government.
(-1)
Does it transfer a function of the private sector to the government? Examples include government ownership or control of any providers of goods or services, such as the land board’s purchase of a self-storage facility, mandatory emissions testing, or pre-kindergarten. Conversely, does it eliminate a function of government or return a function of government to the private sector?
The bill would “use federal child care funds distributed to the states, as well as any related state matching funds and maintenance-of-effort funds, to improve the quality of child care in Idaho for all children and assist low-income families in Idaho who are working or participating in education or training activities with help paying for child care.”
The private sector is the primary (and proper) source of child care. Introducing or increasing government subsidies distorts the market and leads to supply-demand imbalances, overuse, and higher prices.
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Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
Section 56-2506 says, “Providers who receive assistance on behalf of eligible children under this chapter shall enter into and abide by the terms of a provider agreement with the department and shall generate documentation at the time of service sufficient to support the reimbursement for child care services.”
The section includes a list of required records and gives the department unfettered access to enter, monitor, and inspect “the child care facilities of a provider who is receiving assistance on behalf of an eligible child” at “any time of business operations.”
The bill also includes significant enforcement procedures.
Participation in programs like the “Idaho child care program” subjects service providers to a host of regulations, reporting, and government oversight, yet non-participation becomes increasingly difficult as government subsidies increase, and the market tilts toward public funding. Much like medical providers are heavily regulated because of their ostensibly “voluntary” participation in Medicare and Medicaid (EMTALA being just one example), so child care providers will be increasingly swept into the regulations that accompany government funding.
(-1)
Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth?
One of the more egregious elements of this program is how aggressively it redistributes wealth, not just to the poor, but to a significant swath of the middle class as well.
Section 56-2504 of the act would lay out eligibility criteria, including family assets of up to $1 million, family income of up to 155% of federal poverty guidelines (FPG) based on family size (with an increase to below 170% not disqualifying), and family income of 85% of state median income (SMI) based on family size.
For a family of four in FY 2026, 155% of FPG is nearly $50k, and these numbers scale with family size, so the more kids you have, the higher your income can be (even as the subsidies received increase). A family of six could earn nearly $67k per year and still qualify.
The 85% of SMI calculations are even higher, with a 4-person household at $53, 673 and a 6-person household at $70,848.
The bill also picks winners and losers, with section 56-2505 explicitly calling for the department to prioritize those who are homeless, families caring for a child with a disability, foster families, TANF recipients, families receiving child welfare preventative services, and families with a parent aged 19 or younger.
(-1)
Does it increase government spending (for objectionable purposes) or debt? Conversely, does it decrease government spending or debt?
The fiscal note for the bill states it won’t “expand eligibility beyond existing appropriations,” but this is a bit of a rhetorical trick because the program's appropriations continue to grow.
Beyond this issue, the fiscal note states that the Idaho Child Care Program “will continue to be funded through existing federal child care funds,” but this is also overstated.
The bill explicitly states that funding will come from “federal child care funds distributed to the states, as well as any related state matching funds and maintenance-of-effort funds.”
The state matching funds are based on Idaho’s FMAP rate — the same number driving the massive increases in Medicaid funding, and the maintenance-of-effort (MOE) funds are based on historical state spending from before this federal program existed.
For 2025, Idaho’s matching-fund allocation was $6.56 million, with an additional $1.18 million for MOE.
Even beyond state funding, reliance on federal funds is an ongoing and escalating problem in this program (and in many others), increasing the state’s dependence on the federal government and individuals’ dependence on government in general.
It’s also worth noting that federal funding isn’t free. As of March 12, 2026, the federal debt stands at $38.9 trillion, and it continues to grow. Seeking or increasing reliance on federal dollars in any capacity compounds unsustainable federal spending, driving our nation ever closer to bankruptcy and mortgaging the futures of this and future generations.
(-1)
Does it violate the principles of federalism by increasing federal authority, yielding to federal blandishments, or incorporating changeable federal laws into Idaho statutes or rules? Examples include citing federal code without noting as it is written on a certain date, using state resources to enforce federal law, and refusing to support and uphold the tenth amendment. Conversely, does it restore or uphold the principles of federalism?
Similar to Medicaid, participation in the federal Child Care and Development Fund (CCDF) program makes the state dependent on federal funds and subjects it to the rules and mandates that accompany them.
Even beyond the funding and program structure, the bill itself is full of delegation to federal requirements and incorporation of federal law.
Section 56-2502 says, “The department shall administer the program in a manner consistent with this chapter and with all applicable federal requirements.”
Section 56-2505 says the department can make certain eligibility adjustments by rule, but only if such adjustments “comply with federal law”.
Enforcement provisions are triggered by a “reasonable suspicion” that a provider has sought payment “in a manner contrary to state or federal law,” which makes the state responsible for enforcing any federal laws potentially deemed applicable to the situation.
All told, the bill generically references or requires compliance with “federal law” 14 times, with no limitation on scope or application.
As IFF has stated many times before, broadly referencing or requiring compliance with “federal law” subordinates state law to changeable federal rules and statutes, allowing the federal government to effectively change state law without the Legislature's knowledge or consent.
(-1)
