Governor’s executive budget proposes education increases, transportation bond capacity and reserves; holds $100M for tax relief

BOISE — Laurie Wolf, administrator of the Division of Financial Management, presented the governor’s executive budget to the Joint Finance and Appropriations Committee (JFAC) on Jan. 8, summarizing revenue forecasts, maintenance costs and recommended enhancements for fiscal years 2025 and 2026.

Wolf told the committee, “As you heard from governor Little yesterday, this is his keeping promises budget.” She said the administration used a conservative revenue forecast and maintained a structural balance while placing money in reserve accounts and targeting investments in education, transportation, workforce development, natural resources and cybersecurity.

The nut of Wolf’s presentation was fiscal restraint paired with targeted new spending. The administration estimates general-fund revenue at about $5.9 billion for FY2025 and roughly $6.2 billion for FY2026, leaving projected ending balances of about $383 million (FY2025) and $227 million (FY2026) before certain transfers. The budget recommends transferring $59 million to the budget stabilization fund and $50 million to a public education stabilization fund in FY2026; the presentation said those transfers bring record-level reserves and a $1.4 billion revert reserve.

On expenditures, Wolf laid out the maintenance and enhancement structure JFAC will use when reviewing agency budgets. Recommended enhancements total roughly $151 million for FY2026 (about $129 million ongoing, per the administration). Major items the governor included: - Education: $150 million for public schools overall, including about $83 million aimed at teacher pay and nearly $30 million for health insurance costs. The budget also sets aside $50 million in revenue adjustments for potential education choice initiatives tied to enabling policy legislation. - Transportation: $50 million proposed to expand bonding capacity for Idaho Transportation Department projects and a 3% increase to the strategic initiatives fund (raising annual program total to just under $312 million). The presentation said additional bonding capacity would support roughly $800 million of prioritized projects. - Workforce and higher education: $25 million for workforce training (described as $15 million one-time for matching grants and $10 million ongoing for career technical education operations) to expand capacity where community and technical colleges face wait lists. - Natural resources and fire response: a supplemental $60 million to backfill the fire suppression account for FY2025 and a requested ongoing $40 million beginning in FY2026 to stabilize the fund. Wolf said the five‑year average state fire suppression cost is about $40 million, and the administration intends the ongoing funding to reduce year-to-year volatility. - Water projects: $30 million ongoing to the Idaho Water Resource Board to support prioritized recharge projects. - Cybersecurity and public safety: $10 million for ITS to address cybersecurity and infrastructure replacement needs identified across state agencies, and programmatic investments in public safety, including a $500,000 continuation of a fentanyl program and other corrections-related resources. - Housing and health: $15 million one-time to the workforce housing fund and support for medical residency positions (roughly $850,000 to fund about 18 residency slots) and a $500,000 ongoing rural physician incentive program.

Wolf also briefed JFAC on the state public defense budget. She said the FY2026 recommendation for state public defense totals $83 million to support the consolidated state public defense operations. Wolf described a mid-cycle Supreme Court decision and difficulty filling contract-attorney positions as drivers of higher costs; the administration proposed a FY2025 supplemental of $5.4 million and an additional $16.8 million in FY2026 as part of its approach pending policy decisions about funding sources and transfers into the public defense fund.

Committee members pressed Wolf on several points. Senator Cook asked for clarification of “contract inflationary adjustments” (the administration said those are contract-driven maintenance costs agencies cannot avoid). Representative Price contrasted last year’s lower headline growth with the current budget’s larger percentage increase and Wolf explained part of the apparent increase is a reduction in transfers compared with last year and changes in population-driven costs and employee benefit assumptions.

On wildfire funding, Senator Carlson and others raised questions about permanently increasing the state’s share of suppression costs. Wolf said the supplemental $60 million recompenses the fund for this season’s spending and the $40 million ongoing is designed to maintain the account at an appropriate level so the state can respond year to year.

The presentation included technical explanations of how the administration arrived at revenue numbers, how maintenance costs (employee compensation and benefit changes, contract inflation and replacement items such as IT security needs) were treated in the budget, and the administration’s preference for conservative forecasting.

Ending Wolf’s remarks, she reiterated the administration’s priorities — education, transportation, workforce and natural resources — and said the budget is “structurally balanced” while building reserves and leaving money available for tax relief. Wolf told members the governor “holds a hundred million dollars for tax relief” and is prepared to work with the Legislature on the details.

Looking ahead, the administration and Legislative Services staff will present agency-specific detail to JFAC over the next weeks; Wolf and staff answered member questions during the session and flagged areas where policy choices will affect ultimate funding paths, especially public defense, education choice initiatives and transfers into statutory funds.

The committee did not take formal action on the budget at this meeting; Wolf’s remarks were a staff presentation and Q&A during the meeting’s agenda item on the executive budget.

Ending The briefing closed with chair and co-chair reminders of the committee schedule and the next steps: agency-level hearings and work‑group assignments in the coming days. Members and staff said they would follow up with more detail on several programs, including GEAR-funded workforce grants and the mechanics of public defense funding.