Governor's "keeping promises" budget: $151 million in recommended enhancements, transfers to reserves, and targeted investments in education, transportation and

Laurie Wolf, administrator of the Division of Financial Management, presented the governor's executive budget to the Joint Finance and Appropriations Committee on Jan. 8, outlining revenue projections, recommended enhancements and a set of policy priorities the governor calls a “keeping promises” budget.

Wolf told the committee that education remains the governor's top priority and that the executive recommendation includes about $150 million in additional funding for public schools for FY 2026, including $83 million toward teacher pay and approximately $30 million for teacher health insurance. The budget also contains a $50 million placeholder for education choice initiatives contingent on future policy action.

Fiscal framework and balances The presentation used a conservative revenue forecast. Wolf said total FY 2025 revenue was projected at about $5.9 billion and the FY 2026 baseline (combined lines shown to committee) at roughly $6.2 billion. The recommended budget leaves a projected ending balance of about $383 million for FY 2025 and about $227 million for FY 2026 after proposed expenditures and transfers.

The governor recommends transfers to strengthen reserves: a proposed transfer of $59 million to the Budget Stabilization Fund (statutory maximum consideration) and $50 million to the Public Education Stabilization Fund in FY 2026. Wolf said those moves would leave the state's revert reserve at about $1.4 billion, roughly 22% of the budget.

Enhancements and maintenance Wolf said recommended enhancements total about $151 million for FY 2026, of which about $129 million are ongoing. Maintenance costs called out by staff include a 5% employee compensation recommendation aligned with prior CEC language (explicitly split between state employee and teacher costs), higher per-employee benefit costs (from about $13,000 to $14,300 per person), contract inflationary adjustments and IT replacement and security items identified by Information Technology Services (ITS).

Major program investments highlighted - Education: $150 million for public schools overall, including $83 million for teacher pay and nearly $30 million for teacher health insurance; $50 million set aside for education choice initiatives pending policy approval. Wolf said the governor wants to focus on literacy, accountability and rural school facilities. - Transportation: $50 million for an expansion and congestion-mitigation fund to preserve bonding capacity for high-value projects; a 3% increase to strategic initiative funds (raising total strategic funding to just under $312 million annually). - Workforce and career technical education: $25 million total—$15 million one-time grant program requiring private match to expand capacity at community and technical colleges and $10 million ongoing for Career Technical Education operations. - Natural resources and fire: a FY 2025 supplemental of $60 million to backfill the fire suppression account for last season's costs and $40 million ongoing in FY 2026 to stabilize the fire suppression fund; $30 million ongoing for irrigation/recharge projects administered by the Idaho Water Resource Board; $5 million for aviation and detection technology and aviation capacity. - Public safety and cyber security: $10 million for statewide cyber security and infrastructure replacement (ITS-managed); $500,000 continuing for the fentanyl initiative; funding for prison safety and contraband mitigation. - State public defense: Wolf said the transition of public defense from counties to the state (effective Oct. 1) and a December Supreme Court decision increased projected costs. The governor recommended a FY 2025 supplemental of $5.4 million and an FY 2026 increase of $16.8 million; the total FY 2026 recommendation to support state public defense was described as $83 million while noting policy choices remain about funding sources and transfers into the public defense fund (which draws from online sales tax distributions).

Staff and follow-ups Wolf and committee staff were asked multiple technical questions about line items and terminology. Committee members requested additional documentation, including a history of prior GEAR (federal COVID-related) funds used for workforce-housing and related programs; Wolf said staff would provide that information. Staff also flagged that ITS had reviewed agencies for security risks and recommended critical items be covered by agencies' replacement budgets.

Areas of concern raised in discussion Several members raised concerns about the size and permanence of the proposed ongoing $40 million fire-fund contribution; one member said the federal government had expanded firefighting capacity on federal lands and asked whether the state should revisit its role. Members also asked for clarity on TechEm bond capacity, the relationship between transfers and total spending growth, and how workforce and housing funds would be distributed.

Why it matters: The governor's budget sets the baseline for the session's appropriations debate and includes reserve-building and targeted investments the administration says are intended to preserve bond capacity, address infrastructure and workforce needs, and maintain a structurally balanced budget. Committee analysts and work groups will examine maintenance requests, agency replacement items, and enhancements in detail during the next several weeks.