Idaho's budget picture not so bad after all

For weeks, Idahoans have heard warnings about a tightening state budget: slowing revenues, shrinking margins, and the need for Gov. Brad Little’s proposed spending cuts. But as lawmakers dig deeper into the numbers, a clearer picture is emerging: Idaho’s fiscal outlook is stronger than the early-session alarm suggested, and deep cuts may not be necessary.

This week, the Joint Finance-Appropriations Committee unanimously adopted more optimistic revenue projections from the Economic Outlook and Revenue Assessment Committee. The predictions — $5.7 billion for this year and $5.9 billion for next — are 2.8% higher for FY 2026 and 2.4% higher for FY 2027 than those used in the governor’s budget. Those small percentages translate to big dollars: an additional $152.5 million this year and $137.4 million next year.

That’s enough to change the conversation.

JFAC co-chair Rep. Josh Tanner acknowledged as much, saying the numbers — and recent upticks in corporate tax revenue — show the state has “ample room” in its budget. His statement stands in sharp contrast to the governor’s more pessimistic forecast that prompted 3% agency holdbacks, a freeze on teacher and state employee raises, and proposed cuts to Medicaid and other programs.

Even some Republicans on budget committees hinted that the gloomier estimates may have overshot the mark. The independent economists who briefed EORAC provided more evidence that Idaho remains on solid footing. While the national picture shows mixed signals — rising unemployment alongside positive GDP — Idaho’s economy continues to perform remarkably well.

The state’s unemployment rate has held steady at 3.7%, one of the lowest in the nation. Population growth remains strong, powered by continued in‑migration. Idaho expects to add 21,000 jobs by 2027, with expanded hiring across health care and social services. Wage growth is moderating from its post-pandemic highs, but economists emphasized it represents a return to a healthy pre‑pandemic normal — not a downturn.

Even Idaho’s agriculture sector, despite lower crop prices driven by global oversupply, saw total cash receipts increase from $11.8 billion to $12.1 billion, thanks mainly to strong livestock markets and record exports.

Given all this, members of JFAC, including Democrats Janie Ward-Engelking and Melissa Wintrow, argued that the higher revenue forecast should prompt reconsideration of the governor’s proposed cuts. If revenues continue on their current track, Idaho could avoid Medicaid cuts, maintain program funding and even revisit raises for teachers and state employees.

This is not an argument for reckless spending. It is an argument for responsible budgeting based on real conditions, not overly cautious projections. Idaho’s economy is not faltering. It is stabilizing after an overheated period, while remaining strong by every meaningful measure.

Yes, Idaho’s economy faces the same uncertainties as the rest of the country. Yes, wage growth is moderating. Yes, agriculture is navigating a mixed year. But none of this adds up to a crisis.

The Legislature should build a budget that reflects Idaho’s actual fiscal health. The numbers show the state is standing on solid ground. There is no need to cut deeper than necessary.