Health and Welfare presents reorganization and budget requests; committee presses on fleet, staffing and contractor use

The Idaho Department of Health and Welfare (DHW) outlined a planned internal reorganization and related budget requests to the Joint Finance-Appropriations Committee on Jan. 13, telling legislators the changes are intended to align the department’s budget structure with how work is actually performed.

Alex Williamson, budget and policy analyst with the Legislative Services Office, provided an overview of the department’s operating structure and the governor’s budget recommendation. Director Alex Adams described the reorganization as an effort to improve "line of sight" and accountability across the department, which he said employs roughly 3,000 people and manages programs ranging from Medicaid to vital records. "Budgets are laws, not suggestions," Adams told the committee.

Key proposed and discussed items

- Reorganization and alignment: DHW proposes splitting divisions and renaming units to align budgeted programs with day-to-day administration. Changes include creating a fourth deputy director, moving behavioral health functions under Medicaid, renaming divisions (for example, child welfare to Youth Safety and Permanency), and moving certain programs such as Extended Employment Services (EES) to the Medicaid budget unit because Medicaid staff currently administer them.

- Fleet replacement: The department asked to replace 60 vehicles in a one-time request totaling $1.8 million for the vehicle replacements shown in the 2026 request. Director Adams said DHW operates about 435 state vehicles statewide and aims to replace the fleet on a seven‑year schedule. The vehicles proposed for replacement have odometer readings ranging from about 105,000 to 159,000 miles. Committee members asked for a detailed inventory and mileage breakdown to justify replacements.

- MMIS and IT positions: DHW told the committee it is hiring information-technology personnel to support a Medicaid Management Information System (MMIS) upgrade that the department described as a roughly $180 million project. The department said the IT positions connected to MMIS were posted and expected to be filled in coming weeks.

- Ombudsman: Committee members were told the new state ombudsman, Trevor Sparrow, has visited the department and that agency staff have pledged to provide him information needed for oversight.

- Licensing and certification / contractor authority: Licensing and certification officials asked the committee for a statutory exemption that would allow Department of Health and Welfare divisions to transfer personnel dollars to operating-expenditure categories where necessary. The department has historically used contract nurses to perform surveys and certifications when in-house staffing was insufficient; Director Adams said in-house staff earn about $35 per hour while contract staff have cost roughly $90–$95 per hour. The committee discussed a 2024 provision (cited in the budget slides as section 8 of Senate Bill 1268) that restricts transfers from personnel (PC) to operating (OE) and heard that the governor recommended the department’s requested exemptions for both the supplemental and the 2026 request.

What committee members pressed and next steps

Lawmakers asked for more detail on the vehicle fleet (mileage and replacement justification), on hiring status for the MMIS-related IT positions, and on contractor vs. staff spending in licensing and certification. Several members asked for a full list of vehicles targeted for replacement and for confirmation about whether previously authorized replacement dollars were spent. Director Adams said DHW will provide more detailed lists and updates; he told the committee he is prioritizing child-welfare needs and ensuring the budget reflects the operational structure already in use.

The committee set division-level hearings and workgroup meetings for further review of the DHW budget; the larger Medicaid budget review will occur in March.