Revenues Fall Short Early in Fiscal Year
BOISE, Idaho — Idaho’s general fund revenues remain below expectations two months into the 2026 fiscal year, but new spending reductions have shifted projections from a deficit to a modest surplus, according to the latest state budget report.
The September General Fund Budget Monitor shows state revenues were $22.6 million, or 2.8%, below the revised forecast issued by the Division of Financial Management. Idaho operates on a fiscal year beginning July 1 and ending June 30.
Holdbacks Ordered by Governor
Earlier this year, lawmakers and Gov. Brad Little approved more than $450 million in revenue cuts, including tax relief and a new education tax credit program. As revenues fell short in July and August, Little ordered a 3% holdback in spending for all state agencies except public schools.
With those cuts included, the state now projects a $21.8 million year-end surplus. Without them, Idaho was on track for an $80 million deficit — a violation of the state constitution.
Differing Views on Fiscal Outlook
Democratic leaders have raised alarms, saying the cuts will harm vulnerable Idahoans. House Minority Leader Ilana Rubel (D-Boise) warned that reduced Medicaid funding and other reductions will impact seniors, disabled residents, and families in poverty.
“This is not a disaster on the horizon; this is a disaster right now,” Rubel said.
Republican leaders counter that Idaho’s finances remain solid. Sen. Scott Grow (R-Eagle), co-chair of the Joint Finance-Appropriations Committee, said it is too early in the fiscal year to draw conclusions.
“The sky is not falling; this is not 2008, 2009 or 2010. This is a wait and see. Two months do not a year make,” Grow said, adding that revenue collections later in the year are more critical.
Broader Economic Picture
Idaho Division of Financial Management Administrator Lori Wolff said the state economy remains strong, with steady job growth, low unemployment, and solid sales tax collections. She expressed confidence that Idaho can continue funding priorities such as education, infrastructure, and public safety while keeping taxes low.
Federal Tax Law Impact Unclear
One unknown factor is whether Idaho will adopt provisions from President Trump’s recently signed One Big Beautiful Bill Act. The federal law eliminates taxes on tips, overtime pay, car loan interest, and expands deductions for seniors.
If the Idaho Legislature chooses to align fully with these changes, the Tax Foundation estimates it could reduce state revenue by about $167 million. Lawmakers will take up the issue when the 2026 legislative session begins in January.
Related Coverage
- Idaho News – https://idahonews.co/idaho-news-3/
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