Idaho state agencies told to submit plans for more budget cuts
Clark Corbin
(Idaho Capital Sun) Idaho state agency directors were told this week to submit plans to cut their budgets by up to an additional 2% for the current fiscal year to balance the state budget, according to a new budget memo released Monday.
In an interview Tuesday morning, Sen. Scott Grow, R-Eagle, said the memo about planning for new budget cuts was sent to state agency directors because of uncertainty over how the Idaho Legislature’s new federal tax conformity bill, House Bill 519, will impact the amount of revenue available to spend in the state budget.
“The big issue right now is tax conformity,” Grow told the Idaho Capital Sun. “And I don’t know where we are, but you saw a bill that came up Friday from the House that essentially conformed (with federal tax changes from the One Big Beautiful Bill Act).”
In the new budget memo, Keith Bybee, budget and policy analysis division manager for the Idaho Legislative Services Office, gave agency directors until noon on Friday to submit budget reduction plans.
Under the memo, state agency directors must submit two plans – one for cutting an additional 1% and another plan for cutting an additional 2% from their budgets in both this year’s fiscal year 2026 and next year’s fiscal year 2027.
Those new cuts would be in addition to the 3% budget cuts that Gov. Brad Little announced last summer in response to state revenue shortfalls, which could bring the total impact of the cuts up to 5% for both this year and next.
“While JFAC is working through the current budget cycle for FY 2026 and FY 2027, it is evaluating options to balance the state budget,” Bybee wrote in Monday’s memo. “One of those options is to further reduce budgets in FY 2026 and FY 2027.”
Senate Minority Caucus chairwoman says she doesn’t support additional cuts, calls on Legislature to dip into rainy day funds
Idaho Education News first reported on the additional new budget reductions Monday.
Bybee sent the memo on behalf of the co-chairs of the Idaho Legislature’s Joint Finance-Appropriations Committee, or JFAC for short.
JFAC is a powerful committee of the Idaho Legislature that sets all of the state budgets for every state agency and department. Grow and Rep. Josh Tanner, also R-Eagle, are the two co-chairs of JFAC.
Senate Minority Caucus Chair Janie Ward-Engelking, a Boise Democrat who serves on JFAC, said she strongly opposes new budget cuts, which she said will hurt the state coming this late in the fiscal year.
Idaho runs on a fiscal year calendar that begins July 1 and ends June 30 each year. That means that the current fiscal year 2026 is a little more than halfway over.
“We are already cutting into the bone on some of these agencies,” Ward-Engelking said in an interview at the Idaho State Capitol. “Half of the year is already done, so half of their budget or more has been expended, depending on if it is personnel, and we could be talking about massive furloughs. I am not in favor of this.”
Instead of cutting state agency budgets deeper, Ward-Engelking said the state should dip into its rainy day reserve funds or make implementation of the federal tax changes effective as of January 2026, not retroactive as currently proposed.
“We have rainy day funds,” Ward-Engelking said. “That’s taxpayer money that is sitting there. We seeded the clouds. We made it rain. But we can fix this.”
After the Legislature cut state revenue by approving $450 million in tax cuts and tax credits in 2025, Ward-Engelking blamed the Idaho Legislature for the budget issues dominating the 2026 session. Ward-Engelking said legislators cut taxes too deeply, which already reduced state revenue too much.
Senate Minority Leader Melissa Wintrow and House Minority Leader Ilana Rubel, both D-Boise, released public statements Tuesday afternoon opposing the new cuts.
“Let’s be clear about what’s happening,” Wintrow wrote. “Republicans created a budget mess with reckless tax giveaways tilted toward the wealthy, then imposed a 3% holdback that is already squeezing the services Idaho families pay for and expect. Now, Republican leaders are demanding another round of cuts in the middle of the year to make room for massive tax breaks for corporations and billionaires, including costly corporate write-offs that reward investments made outside Idaho.”
Rep. Ben Fuhriman, R-Shelley, worried Tuesday afternoon that cutting state budgets this late in the current budget year could lead to furloughs of state employees, which he said would mean less contributions for the retirement program for state employees.
“We can slice ourselves 100 different times with a little knife and think it’s nothing, but every little drop of blood becomes a lot,” Fuhriman said during Tuesday’s House Commerce and Human Resources Committee meeting. “So at what point are we just cutting and hurting ourselves even more down the road?”
Tanner, who is a co-chair of JFAC, told Fuhriman that is why JFAC is asking state agency directors to submit the plans for the new budget holdbacks.
“Why we sent that to the agencies is so that they can actually look where they can actually do some of this stuff at,” Tanner told Fuhriman. “It’s not like us just going and saying, ‘We’re just going to cut it out, cut straight across the top.’ We want them to come back to us of how those actual cuts are going to look within their agency.”