Budget Committee Unveils Plan for Midyear Reductions
Leaders of Idaho’s budget-writing committee outlined a proposal to reduce spending across most state agencies during the current fiscal year. The proposal would exempt K to 12 public schools, Medicaid, the Department of Corrections, and Idaho State Police.
The plan would reduce agency budgets by either one or two percent. Lawmakers are expected to vote on the proposal later this week.
Committee leaders said the move is intended to manage fiscal uncertainty tied to the projected cost of aligning Idaho’s tax code with recent federal tax changes.
Potential Impact on Agencies and Carryover Funds
The proposed reductions would save the state an estimated $15.3 million at the one-percent level or $28.9 million at the two-percent level for the current fiscal year. Higher education institutions and several state agencies would be affected.
Budget leaders also plan to vote on whether similar reductions should continue into the next fiscal year, which begins July 1. The committee is also considering transfers of more than $100 million into the state’s general fund, including unspent scholarship funds.
State finance officials said the governor’s budget proposal sought to balance ongoing reductions with one-time savings in order to avoid long-term harm to essential services.
Mixed Reactions From Lawmakers
Some lawmakers expressed concern that broad, across-the-board reductions could limit flexibility before agencies present detailed budget requests. Others said the structure still allows adjustments during the budget-setting process.
Legislative leaders acknowledged the approach is unusual but said it provides a starting point as revenue projections remain uncertain.
House Advances Federal Tax Alignment Bill
The Idaho House passed legislation to align state tax law with recent federal tax changes, including provisions related to tips, overtime income, and other individual tax benefits.
Supporters said the measure allows Idaho residents to receive tax relief sooner based on 2025 earnings. Critics raised concerns about the effect on state revenues, especially in light of the proposed budget reductions under consideration.
The bill would reduce state revenue by an estimated $155 million in the current fiscal year. Legislative leaders said the tax relief could be absorbed within the current budget, though agency leaders have been asked to prepare for possible spending reductions.
The bill now moves to the Idaho Senate for consideration.
Education Rulemaking Moves Forward
The House Education Committee approved several rule changes, including updated social studies standards for kindergarten through 12th grade. The standards were revised after lawmakers rejected portions of earlier proposals.
State education officials said the updated standards place greater emphasis on U.S. history and foundational topics. The state does not mandate curriculum, leaving local districts to determine how to meet the standards.
Lawmakers also approved updates to special education rules to align with federal requirements following findings of noncompliance. Additional changes to teacher ethics rules were adopted, including restrictions on personal email communication with students and misuse of school-issued devices.
With approval from both chambers, the rules are now in effect for the 2026 legislative session.
What Comes Next
Budget writers are expected to vote on the midyear reduction package and potential ongoing cuts. Lawmakers will continue balancing agency funding requests against revenue projections as the session moves forward.
The Senate is expected to take up the tax conformity bill in the coming days, setting the stage for further debate over the fiscal impact of federal tax alignment.
Related Coverage
Idaho News – https://idahonews.co/idaho-news-3/
National News – https://idahonews.co/national-news/
About the Author
