Governor’s "keeping promises" budget keeps structural balance while funding education, transportation and wildfire response

Laurie Wolf, administrator of the Division of Financial Management, told the Joint Finance and Appropriation Committee on Jan. 8 that the governor’s executive budget is a "keeping promises" budget that maintains a conservative revenue forecast while funding education, transportation, wildfire response and other priorities.

The proposal projects an ending general fund balance of about $383 million for fiscal 2025 and $227 million for fiscal 2026 after recommended expenditures. It includes $151 million in recommended enhancements for FY 2026, a $59 million transfer to the state budget stabilization fund and a $50 million transfer to the public education stabilization fund, and it holds $100 million for potential tax relief.

Why it matters: the governor frames the request as balancing near-term tax relief with investments intended to address long-term capacity and public-safety needs — higher teacher pay and school supports, transportation projects, workforce and housing programs, water and wildfire funding, and cyber-security upgrades.

Wolf said the administration used a conservative revenue estimate in updating the budget and emphasized maintaining a structural balance. "We as always took a conservative approach to how we put this budget together," she said.

Key numbers and posture

- Total recommended enhancements for FY 2026: about $151 million (ongoing and one-time combined). - Held for tax relief: $100 million (policy decisions to follow). - Recommended transfers to rainy-day accounts: $59 million to the budget stabilization fund and $50 million to the public education stabilization fund. Wolf said that after those transfers the state would hold about $1.4 billion in reserve, or roughly 22% of the budget. - Employee compensation: the governor recommends a 5% or $55 increase (split between state employees and teachers, aligned with prior career-ladder language). - Public schools: an additional $150 million overall, including roughly $83 million toward teacher pay and nearly $30 million toward health insurance costs for teachers. - Population-forecast adjustments (population-driven maintenance costs): roughly $80 million.

Education and workforce

Wolf said education remains the governor’s top priority. The budget includes $50 million held for education-choice initiatives contingent on a separate policy bill, $50 million set aside for rural school facility needs and mental-health/readiness work, and a proposed $25 million for workforce training: $15 million one-time for capacity-building grants (requiring private match) and $10 million ongoing for career and technical education (CTE) operations.

Transportation and infrastructure

The governor recommends $50 million to expand a transportation/congestion mitigation fund administered by the Idaho Transportation Department. Wolf said the $50 million would enable additional bonding capacity for high-value expansion projects and that ITD has many unfunded projects. Separately, the budget proposes a 3% increase to strategic initiatives funding for roads and local projects, bringing that annual total to just under $312 million.

Natural resources, wildfire and water

Wolf recommended a supplemental $60 million to backfill the fire suppression account for costs incurred this season, and an ongoing $40 million annually beginning in FY 2026 to stabilize funding for wildfire response. She described the supplemental as a one-time backfill and the $40 million as an ongoing contribution to the fire suppression fund. The governor also recommends $30 million ongoing for the Idaho Water Resource Board for prioritized recharge projects, and $5 million for aviation and early-fire detection tools.

Public safety and cybersecurity

The budget includes $10 million for statewide cyber-security and infrastructure priorities through the state ITS budget and $500,000 to continue the "Fentanyl Takes All" program. On state prisons Wolf cited a roughly $3.4 million request for prison transportation and contraband detection; agency presentations will provide more detail.

State public defense

Wolf detailed updated costs tied to the state’s transition of public defense. The administration is recommending a supplemental of about $5.4 million for FY 2025 and an additional $16.8 million for FY 2026; total FY 2026 support for state public defense was described as roughly $83 million. Wolf said the agency reduced contract-attorney spending to try to stay within earlier budgets but a December Supreme Court decision and difficulties filling contract positions increased costs. Funding for the public defense fund is currently drawn from a sales-tax distribution and the administration noted that statute or policy choices will be required to change that funding method.

Questions from lawmakers

Committee members pressed Wolf on revenue assumptions, the scale of new spending compared with tax relief, the transportation funding request, and wildfire funding mechanics. Wolf and other staff explained that some of the year-over-year percentage differences reflect how transfers were carried last year and the treatment of population-driven maintenance costs for items such as Medicaid and prison populations.

What’s next

Wolf closed by saying the administration will provide more detail as agencies present their requests to the committee. Several committee members requested additional documentation on specific items mentioned in the presentation, such as the use of prior GEAR (pandemic-era) education funds and long-term scheduling for IT and fire-related replacements.

Ending

Committee members thanked Wolf and staff and signaled follow-up questions during the agency presentation schedule over the coming weeks.