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Population changes and medical contract negotiations drive corrections cost pressure, analysts say
Summary
Legislative analysts told the committee rising county and out‑of‑state placements and higher medical utilization are the primary drivers of supplemental requests for the Department of Correction. The agency estimates a negotiated contract could raise medical costs about 10%; if the contract goes to competitive bid the agency said costs could rise
The Joint Finance Preparations Committee was told Feb. 4 that most of the Department of Correction’s most recent supplemental requests are driven by population changes in county jails and out‑of‑state placements and by higher than expected medical utilization.
Noah Peterson, budget and policy analyst for the Legislative Services Office, presented the county/out‑of‑state placement and medical services divisions together because both are operating cost centers without dedicated full‑time positions. Peterson said that per‑diem population shifts drove supplemental requests and that the agency expects ongoing FY2026 funding needs to be higher than the FY2025 base if current population projections hold.
Key points from the presentation - Population‑driven changes: Peterson said the county and out‑of‑state placement program asked for supplemental increases in FY2025 to cover higher than projected housing costs. The LSO presented a FY2026 ongoing population adjustment of roughly $4.03 million to reflect updated projections. - Medical contract uncertainty: the agency is negotiating with its current medical contractor. The department’s budget presentation said a successful negotiated renewal would add about 10% to annual medical costs; if negotiations fail and the contract goes to bid the agency projected a 30–40% increase in cost. - County per diem: Peterson reported county per‑diem averages varying by length of stay, and Director Tewalt told the committee those statutory county per‑diems are set in Idaho law to encourage timely state pickup of county detainees (quoted the statutory approach rather than specific code citations during the hearing).
Why it matters: both population movement and medical costs flow directly into the corrections operating budget and can create large, recurring pressures on the general fund. Negotiations with medical vendors or a shift to competitive bids could materially change the department’s baseline costs for FY2026.
Questions and discussion Senator Zieterfeld asked about how daily county per‑diem rates are determined. Noah Peterson said the rate for short‑term county housing (days 1–7) and for longer stays is the driver of average county per‑diem calculations and that shifts in the mix of short‑term versus long‑term county placements affected the year‑to‑year averages displayed in LSO charts. Director Tewalt told the committee that the per‑diem rates are established in Idaho code and that the bifurcated rate structure is designed to encourage rapid state pickup from county jails.
What was not decided The committee received the analysis and asked for additional detail; it did not take a formal action or vote during the hearing.
Ending: analysts emphasized medical contract negotiation outcomes and population forecasts as the primary near‑term budget risks for the Department of Correction; the agency and staff said they would provide updated projections and documentation for the committee to consider.
