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Committee hears governor's budget projects roughly $700 million structural surplus for 2025-26
Summary
Legislative staff told the Joint Finance-Appropriations Committee that Idaho's current revenue forecast leaves a structural gap of about $700 million between recurring revenue and projected recurring expenditures for the next business cycle, giving policymakers room for tax relief or program increases but creating trade-offs.
Keith Bybee, division manager for budget policy analysis in the Legislative Services Office, told the Joint Finance-Appropriations Committee that the governor's budget projects ongoing revenues will exceed ongoing expenditures by roughly $700 million over the next business cycle, based on the administration's revenue forecast for fiscal 2025 and 2026.
That figure reflects a shift from the COVID-era revenue peak and a new baseline driven in part by population growth and resulting income-tax collections. Bybee said Idaho's general fund rose from about $4 billion to more than $6.2 billion during the pandemic period and that the state's new normal is closer to the $5.7 billion 2024 actual collections level, with the governor's recommendation projecting higher receipts in the near term.
The significance, Bybee said, is that the legislature enters this session with more flexibility than in tighter years but must choose how to allocate one-time and ongoing resources. "If a budget is a statement of your values, your previous legislatures have done you a big favor," he told members, while also warning that the surplus creates political trade-offs between tax relief and funding public services.
Why it matters: committee members will use these forecasts to set program maintenance levels, evaluate enhancement requests and consider proposals to move cash to savings or one-time projects. Bybee explained the forecast draws on the governor's numbers and takes account of federal pandemic-era funding (CARES Act, American Rescue Plan) and demographic changes that boosted personal income and tax collections.
Key figures and mechanics: the presentation cited a 2024 actual collections baseline near $5.7 billion and a governor's recommendation that yields higher revenues for 2025 and 2026. Bybee described the dashed projection lines on his slide as showing a continued delta between revenues and expenditures that produces the roughly $700 million structural balance. He also explained how reappropriations and executive carryforward mechanics work on agency contracts that cross fiscal years.
Committee context and next steps: Bybee said program maintenance adjustments (benefit changes, contract inflation, statewide cost allocation, employee compensation and public school support) will be a primary focus in coming working groups. The committee will compare agency requests and the governor's recommendation before making appropriation decisions.
Ending: The revenue outlook frames the session's major choices, Bybee said: "You have a lot of choices," but balancing tax relief and ongoing government commitments will be the central challenge for legislators this year.
