One of Idaho’s top budgeters cheered the state’s newest fiscal report showing a balanced budget despite a $95 million dollar dip in projected revenue.
“Idaho leaders have long championed responsible budgeting and conservative principles that promote economic activity. What we’re doing is working,” Gov. Brad Little wrote in a statement on Friday.
Rep. Wendy Horman (R-Idaho Falls), who co-chairs the state budget committee, echoed Little in championing the report.
They point to increasing personal and corporate income tax collections, along with continued growth in Idaho’s gross domestic product, or total economic output.
Factoring in inflation, Idaho’s GDP from 2020 to 2024 increased by 20.4%, according to the federal Bureau of Economic Analysis.
“Our revenue numbers are solid, which is reflective of a solid economy here in Idaho,” Horman said during an interview Monday.
In all, the state took in $5.5 billion from July 2024 to June 2025 – a 1.7% decrease from predictions. Idaho still ended the fiscal year in the black with a $345 million cushion.
Given growth in wages, GDP, as well as a low and steady unemployment rate, Horman said this dip in revenue isn’t indicative of a lagging economy.
“In my opinion, that says more about the forecast than the revenue,” she said, adding that no economic forecast is ever completely accurate.
Despite Gov. Little’s embrace of Idaho’s fiscal performance, his Division of Financial Management told state agencies to plan for potential cutbacks in the current fiscal year.
A memo from DFM Director Lori Wolff on May 29 pointed to the $450 million in tax cuts passed during this year’s legislative session as one of the pain points.
“While we are confident this historic tax relief will help with out-year economic growth, it does result in less revenue than originally projected for [fiscal year] 2027,” Wolff wrote.
In response, she directed all state agencies to propose flat budgets for fiscal year 2027, only adding increases for inflationary reasons, employee health insurance contributions and a possible 1% pay raise.
“Agency supplemental requests from any source of funding should be used as a tool of last resort when all other options have been properly considered and determined impractical,” Wolff wrote.
In the memo, she also told state agencies, excluding K-12 education, to come up with plans to cut current year funding by up to 6%.
“That’s just smart budgeting to prepare for a ‘what if’ situation. We’ve done it before and we’ll likely do it again in the future,” Horman said, noting that anxiety over federal tariffs and market fluctuations have calmed down since the memo’s release in May.
DFM analysts will crunch revenue projections again next month, while state agencies submit their proposed budgets in September.
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