Idaho state revenues continue to lag behind budget projections

Now two months into the 2026 fiscal year, Idaho state revenues continue to lag behind state forecasts, but the state is no longer projecting to end the year with a budget deficit, according to a monthly budget report released last week by the Idaho Legislative Services Office.

According to the September General Fund Budget Monitor report, revenues through the first two months of fiscal year 2026 have come in $22.6 million, or 2.8%, below the revised forecast issued by the Idaho Division of Financial Management.

Idaho runs on a fiscal year calendar that begins July 1 and ends June 30. That means the 2026 fiscal year began July 1 and ends June 30. 

The revenue shortfall is occurring after the Republican-controlled Idaho Legislature and Gov. Brad Little cut state revenues by more than $450 million during the 2025 legislative session to pay for tax cuts and a new education tax credit that allows families to be reimbursed for education expenses including tuition at private, religious schools.

In response to revenue shortfalls, Little ordered all state agencies and departments other than public schools to cut spending by 3% by the end of the current fiscal year, the Idaho Capital Sun previously reported.  

With Little’s 3% budget holdbacks now being calculated, Idaho is projected to end the current fiscal year in June with a $21.8 million budget surplus, according to September’s General Fund Budget Monitor. 

A month ago, before the impact of the 3% budget cuts was included in the calculations, Idaho was projected to end the current fiscal year with a $80 million budget deficit, which would violate the Idaho Constitution. 

Idaho House minority leader says Idaho’s budget situation is serious

Idaho House Minority Leader Ilana Rubel, D-Boise, said Idaho’s budget situation is a “disaster” that will seriously harm Idaho families, people with disabilities and people living in poverty.

“My phone has been ringing off the hook with warnings coming in at full volume,” Rubel said Monday. “This is a catastrophe for people in the most need.”

Rubel said the Medicaid cuts and other budget holdbacks are hurting seniors living in long-term care facilities as well as children and adults with serious disabilities who rely on state funding to get the help they need to live and work. 

“This is not a disaster on the horizon; this is a disaster right now,” Rubel said. 

Idaho Legislature’s budget committee co-chairman says it’s too early in the year to panic about state budget

On the other hand, Republicans who control a supermajority in the Idaho Legislature are saying it is not time to panic.

Sen. Scott Grow, R-Eagle, said Idaho’s budget is still in good shape thanks to conservative budgeting employed by the Idaho Legislature and Little. Grow serves as co-chairman of the Idaho Legislature’s powerful Joint Finance-Appropriations Committee, which sets all the budgets for every state agency and department.

“The sky is not falling; this is not 2008, 2009 or 2010,” Grow told the Sun on Monday, referencing the Great Recession. “This is a wait and see. Two months do not a year make.”

Grow said the state issues budget forecasts based on best-available information from economists, state officials, legislators and other sources.