Expect another year of government cuts and no raises for state employees under Gov. Brad Little’s proposed spending plan for the upcoming fiscal year.
“Across state government, executive agencies will tighten their belts. We’re renegotiating contracts to save money. We’re reprioritizing initiatives,” Little said.
His budget would make permanent the 3% holdbacks he implemented last summer as Idaho faced falling revenue projections, totalling $120 million – excluding K-12 education.
Other ongoing cuts to water anti-pollution grants, further cuts to certain Medicaid services and eliminating more than 100 vacant state employee positions add another $138 million to cover the state’s estimated shortfall.
Little hopes to use $375 million in additional one-time cuts to the local transportation projects fund, as well as redirecting interest income from several other accounts.
“Folks, some of these budget decisions are tough but we will emerge stronger in the long run because of them. This is what fiscal responsibility looks like – planning ahead and living within our means.”
The majority of these cuts are one-time in nature. Lori Wolff, Little’s budget chief, said that’s by design.
“We’re betting on Idaho’s economy. All the indicators show we’re going to grow,” she told reporters Monday.
Alongside these cuts, the governor urged the legislature to fully conform to federal tax changes passed last year by Congress.
“At a time when everything costs more, the Trump tax cuts will provide real relief,” he said. “They will put more money back in the pockets of Idaho’s seniors and working families so they can afford the basics and breathe a little easier.”
The Little administration estimates adopting these tax changes will cost $155 million, though the nonpartisan Idaho Center for Fiscal Policy pegged that number at $435.4 million.
Wolff said nailing down how much conformity will cost has been one of the hardest parts of crafting this year’s spending plan.
Federal definitions for these new policies still have not been released or were just recently given to states, she said.
Ultimately, she said she’s confident in their estimate provided by the Idaho Tax Commission.
Idaho’s state employees, whose salaries are nearly 15% behind private sector wages, would not get a raise this year under Little’s budget.
That, Wolff said, is “simply due to the revenue situation.” “As soon as we have revenue, [employee raises are] always one of the governor’s top priorities.”
“Our unemployment rate is among the lowest in the nation. We lead in personal income growth, and our economic activity continues to
outpace most states, reflecting a diverse and resilient economy.”
This is a breaking news story and will be updated with reaction from legislators later this afternoon
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