Governor’s executive budget emphasizes education, reserves, transportation and public defense funding

Laurie Wolf, administrator of the Division of Financial Management, presented Governor Brad Little’s executive budget to the Joint Finance and Appropriation Committee on Tuesday, outlining the administration’s revenue forecasts, proposed transfers, reserves and spending priorities for fiscal years 2025–26.

The governor’s package is “a keeping promises budget,” Wolf said, and the administration emphasized a conservative revenue forecast, a structural balance and higher ending balances while recommending targeted investments in education, transportation, workforce training, natural resources and public safety.

Key numbers and fiscal approach: Wolf said the administration used a conservative revenue projection for FY 2026 and aimed to preserve structural balance. For FY 2025 the administration estimated total revenue of about $5.9 billion and a projected ending balance of roughly $383 million; for FY 2026 the combined revenue projection was about $6.2 billion with a projected ending balance of about $227 million after recommended transfers. The plan includes a proposed $59 million transfer toward the budget stabilization fund and $50 million to the public education stabilization fund in FY 2026, leaving a revert/reserve balance Wolf described as the largest in state history at about $1.4 billion (roughly 22% of the budget).

Education and workforce: The governor recommended about $150 million in additional spending for public schools, including approximately $83 million toward teacher pay adjustments and about $30 million for health insurance for teachers. The budget sets aside $50 million in a revenue adjustment for education choice initiatives contingent on a policy bill, Wolf said. On workforce training, Wolf described a $25 million package: $15 million one-time for capacity-building grants (designed to require private match) and $10 million ongoing for career and technical education (CTE) operating costs.

Transportation and infrastructure: The presentation included a $50 million recommendation for the transportation expansion and congestion-mitigation fund administered by the Idaho Transportation Department (ITD). Wolf said the $50 million would enable bonding for up to about $800 million in high-value projects after ITD’s final TECHM bond sale; the governor also recommended a 3% increase to strategic initiatives funding (raising the total roughly from $302 million to just under $312 million) that funds state highway and local projects.

Natural resources, water and fire funding: Wolf proposed a supplemental $60 million to backfill the fire-suppression account for FY 2025 (to replace the amounts spent during last season) and an ongoing $40 million for FY 2026 to stabilize fire-fighting resources. She described the five-year average state fire cost at roughly $40 million per year and said the ongoing amount is intended to maintain readiness and avoid year-to-year scrambling for funds. The governor also proposed $30 million ongoing to the Idaho Water Resource Board for prioritized recharge projects and an additional $5 million for aviation and early-detection tools for fire response.

Cybersecurity, public safety and other items: The governor recommended $10 million in ITS general-fund support to address state IT security and infrastructure replacement priorities and $500,000 to continue a fentanyl-reduction program. Wolf also noted investments for physician residency expansion (roughly $850,000 to fund about 18 residency slots in Boise) and $500,000 ongoing for a rural physician incentive program.

State public defense: Wolf told the committee that the state consolidated public defense funding on Oct. 1 and that last year’s appropriation was $52 million. She said the agency originally requested an FY 2026 increase of about $17 million but that a December Supreme Court decision and difficulties filling contract attorneys increased costs. The governor recommended a FY 2025 supplemental of $5.4 million and a $16.8 million additional amount treated as one-time in the submission; Wolf said the total FY 2026 recommendation to support the state public defense transition is $83 million and that the funding source (public defense fund distributions from sales tax) may require a policy decision to change transfers.

Reserves, transfers and tax relief: Wolf said the governor is proposing to transfer $59 million to the budget stabilization fund and $50 million to the public education stabilization fund in FY 2026, and had set aside $100 million in the package for tax relief to be determined with the legislature. She emphasized the administration’s conservative revenue forecasting approach and described the record reserve balances as a buffer for potential future downturns.

Questions from members touched on contract inflation and maintenance lines, the relationship between transfer amounts and year-over-year spending percentages, TECHM bonding capacity for ITD projects, the size and intent of the fire-suppression ongoing amount, workforce housing funding and how childcare or CTE investments would be administered. Wolf said many items would be discussed further when the departments appear for their agency presentations and that staff would provide additional documentation (for example on GEAR/ARPA workforce-housing uses) on request.

What comes next: The committee received the governor’s high-level plan and will hear detailed agency presentations in scheduled hearings. Wolf and DFM staff will return with agency-level detail and supporting documents as JFAC moves into maintenance and enhancement deliberations.