JFAC briefed on FY2025–FY2026 budget: governor proposes smaller ending balances, transfers for roads, fires and housing

Keith Bybee, division manager for budget policy analysis at the Legislative Services Office, told the Joint Finance-Appropriations Committee (JFAC) that Idaho27s general fund revenue peaked during the COVID years and the state27s new revenue trend is higher than the pre‑2020 baseline. "The top red line is our general fund revenues," Bybee said while showing historical collections and projections.

The committee was shown that the state does not expect to revert to the pre‑COVID revenue trend because population growth and other factors have raised the new baseline. Bybee said the governor27s recommended cash reconciliation projects an ending FY2025 cash balance of $338 million and projects an FY2026 ending balance of $227 million under the recommendation.

Why it matters: the presentation framed the legislature27s choices for this session. Bybee highlighted a structural surplus in the near term — a multi‑hundred‑million‑dollar delta between ongoing revenues and projected expenditures — and said the choices for legislators will include tax relief, spending increases for services, and transfers to other funds.

Details and supporting figures: Bybee walked JFAC through the cash reconciliation and budget tables in the legislative budget book. Key figures he cited included: - Revenue baseline: the governor27s recommendation used a revenue forecast of about $5.9 billion for FY2026 (the presentation included several revenue scenarios). - Transfers and adjustments: the governor27s proposed transfers out total roughly $477.3 million in the FY2026 proposal; the FY2025 governor27s transfers out were shown at about $578.9 million (partly offset by a roughly $62.8 million transfer from the closed bond levy equalization fund). - Program totals: the governor27s recommended general‑fund program maintenance total was about $5.4 billion; enhancements in the governor27s proposal were roughly $242 million, yielding a recommended total general‑fund appropriation near $5.65 billion for FY2026. - One‑time vs ongoing: Bybee said the governor relied on approximately $160 million of one‑time cash in the FY2026 recommendation while most other additions were funded from ongoing revenue.

On special items: Bybee explained executive carry forward ($44.4 million cited) and reappropriation (about $16 million carried from FY2024) as routine budget mechanics that preserve authority to finish projects across fiscal years. He also said House Bill 521 (the bill that closed the prior bond‑levy equalization program) resulted in a remaining balance that the state controller will transfer to the general fund — the presentation listed that amount at about $62.8 million.

Savings accounts and risk: Bybee reviewed the state27s savings accounts, noting the budget stabilization fund would reach roughly $939 million if the governor27s recommended $59 million transfer is enacted. He explained the public education stabilization fund functions as overdraft protection for public school support and showed projected balances and caps.

Process and next steps: Bybee and staff reminded JFAC that program maintenance work will begin in committee working groups, and that members must decide how much of the structural balance to convert to tax relief, ongoing program increases, or transfers to other funds.

Ending: The presentation left the committee with a reminder that while the state27s cash position is stronger than in earlier recessions, choices about ongoing spending versus one‑time transfers will determine long‑run structural balance and the size of savings accounts. JFAC scheduled program maintenance hearings and staff followups on several technical items, including the details of transfers and interest earnings on cash balances.