Gov. Brad Little laid out an extensive and ambitious budget plan during his State of the State address Monday, encompassing investments in education, infrastructure and tax cuts.
The initiatives rely on a historic projected $1.9 billion budget surplus, though Democrats argue that money is a result of the government underfunding the needs of its citizens.
Little proposed a $1 billion tax cut spread out over five years by lowering Idaho’s top tax rate from 6.5% to 6.0%. The state only has five tax brackets, with the top bracket including anyone earning more than $7,939.
Such a plan would cost $251 million in its first year, increasing to $341 million by fiscal year 2026, which starts July 1, 2025.
His plan also includes $350 million in income tax rebates, equating to a 12% one-time payment to taxpayers.
Despite both parties vowing to address rising property taxes that have plagued much of the state in recent years, the governor didn’t include any such relief in his proposed budget.
Under Little’s proposal, Idaho teachers would receive a 10% pay raise, as well as $1,000 bonuses due to the increased workload during the pandemic. Classified staff would also receive a 5% pay bump.
Educators and staff would also see about a $4,000 increase from the state to their health insurance premiums.
Schools would have flexibility in how they use $47 million for ongoing literacy programs. It could include all-day kindergarten, hiring reading coaches or other initiatives.
Another $50 million in federal dollars would fund a second round of the governor’s Strong Families, Strong Students program, which saw demand far outpace availability.
The initiative prioritized reimbursing families earning less than $75,000 for education expenses, like new computers, internet bills or homeschooling curriculum.
These grants, Little said, “put families in control of their child’s education, as it should be.”
The rising cost of housing, in addition to skyrocketing property taxes, has frustrated renters and first-time homebuyers who feel financially unable to buy a home in the state they were born and raised in.
Little isn’t recommending lawmakers allocate any cash to the Idaho Housing Trust Fund, which hasn’t been funded since its inception in 1992.
Instead, he proposed using $50 million in federal dollars to help incentivize and fund workforce housing in developments across the state.
State workers could also see a 5% pay increase under the governor’s proposal. Legislators will meet throughout January to make a recommendation to the Joint Finance and Appropriations Committee.
Deferred maintenance on Idaho’s roads and bridges totaling $400 million would be covered under Little’s proposal.
It was a historic wildfire season across the West, including Idaho. The governor hopes to add more than a dozen firefighters to the state’s payroll and boost the fire suppression fund by $150 million.
State veteran homes would give each resident their own, single room with $75 million in capital money, as well as $6.5 million to hire staff to operate the new veteran home in Post Falls.
With the remaining surplus, Little wants to eliminate $175.8 million in debt for state buildings, ultimately saving $63 million in interest payments. He’d also like to cover $250 million in deferred building maintenance out of more than $900 million in estimated costs.
Under his proposal, rainy day funds would increase by $260 million to $1.1 billion across all emergency accounts – about 22% of forecasted state revenue.
In all, Little’s budget totals $4.56 billion – an 8.1% spending increase.
For months, Democrats have waged a war of words against talk of a budget “surplus,” which in their eyes doesn’t hold up to scrutiny.
“This money was generated by systematically underfunding vital services,” said House Minority Leader Ilana Rubel (D-Boise).
Directly responding to Democrats’ criticisms, Little said having to choose between cutting taxes and funding important programs is “false.”
“We can spend less than we bring in, offer tax relief and fund the top priorities – education and infrastructure,” he said.
House Republican leaders, like Speaker Scott Bedke (R-Oakley), agreed that the state shouldn’t create new programs that might not be sustainable during an economic downturn. Instead, he says they should stay the course.
“We didn’t get here by happens chance. This is a process of investment in policy. For years, we’ve created a good business climate here,” Bedke said.
He expects a bill outlining details of the tax cut plan to be introduced this week.
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