Governors "keeping promises" budget emphasizes education, reserve growth and targeted investments; holds $100M for tax relief

Laurie Wolf, administrator of the Division of Financial Management, on Jan. 8 presented the governors executive budget to the Joint Finance and Appropriations Committee, outlining revenue projections, proposed transfers to reserve accounts and recommended enhancements for fiscal years 2025 and 2026.

Wolf described the proposal as a "keeping promises" budget that continues investments in education, infrastructure and workforce while maintaining a conservative revenue forecast and healthy reserves. "This is his keeping promises budget," Wolf said. She told the committee the budget is structurally balanced and maintains an ending balance in both years while using a conservative revenue baseline.

At a glance, the presentation included the following key figures and recommendations (committee staff provided the summary sheet shown to members): a general fund revenue projection of about $5.9 billion for fiscal 2025 and roughly $6.2 billion for fiscal 2026; a projected ending balance of about $383 million for FY25 and $227 million for FY26 after recommended transfers and expenditures; and proposed transfers including a $59 million transfer to the budget stabilization fund and a $50 million transfer to the public education stabilization fund for FY26. Wolf said the proposed transfers and reserves would result in a revert/reserve balance the staff described as the largest in state history, approximately $1.4 billion (about 22% of the budget).

On recommended enhancements, Wolf listed roughly $151 million in total enhancements (ongoing and one-time combined) for FY26, with about $129 million of that ongoing. Major priorities she highlighted included:

- Public education: An additional $150 million for public schools, including a $50 million set-aside for rural school facilities, mental-health supports and accountability for learning and literacy; roughly $83 million recommended toward teacher pay and nearly $30 million for health insurance costs.

- Education choice: A $50 million set-aside in the revenue adjustments for potential education choice initiatives; Wolf said the governor views any policy proposal to use that money as requiring a policy bill before funds would be released.

- Transportation: A $50 million appropriation for a transportation expansion and congestion mitigation fund intended to allow additional bonding for high-value projects; a 3% increase to strategic initiatives funding (bringing annual total toward $312 million) for roads, bridges and local projects.

- Workforce and training: $25 million total for workforce training, including a $15 million one-time block-grant-style program requiring private match to expand capacity at community and technical colleges and $10 million ongoing for Career and Technical Education (CTE) operating support.

- Wildfire and water: A proposed FY25 supplemental to backfill the fire suppression account of $60 million (to replace fire costs already incurred), and a $40 million ongoing FY26 appropriation to support future fire suppression costs; $5 million for aviation and early-detection tools; and $30 million ongoing to the Idaho Water Resource Board for prioritized recharge projects.

- Cybersecurity and public safety: A $10 million recommendation for statewide cybersecurity infrastructure and a $500,000 ongoing investment to continue a fentanyl-reduction program; additional funds indicated for prison security and contraband controls.

- Housing and health workforce: A $15 million one-time transfer to the workforce housing fund and funding for medical residency and rural physician incentives. (Wolf described a medical-residency proposal of $850,000 to fund approximately 18 residency positions and $500,000 ongoing for a rural physician incentive program.)

Wolf also addressed the state public defense consolidation. She said last years appropriation for the new state public defense entity was $52 million; the administration is recommending a supplemental of $5.4 million in FY25 and an additional $16.8 million for FY26 to reach an overall recommendation of about $83 million to support state public defense. Wolf said a recent Idaho Supreme Court decision and difficulties filling contract-attorney positions affected costs and that some funding-pathway questions (for example transfers into the public defense fund) may require policy action.

Committee members asked for additional material and raised concerns during a broad Q&A. Representative Scott Tanner questioned the balance between spending and tax relief; Wolf said the governor preserved $100 million for tax relief while proposing the investments. Senator Jim Carlson said he was concerned about increasing the permanent firefighting appropriation and said, "I just have extreme concerns over over funding for firefighting." Wolf responded that the administration proposed the ongoing funding to provide stability and avoid repeated supplemental requests when fires are costly.

No formal appropriations or votes were taken on Jan. 8. Wolf and staff agreed to provide follow-up materials the committee requested during questioning, including a report on prior GEAR fund uses for workforce and education grants and documentation about the fire-suppression account balance history.

The committee will begin agency presentations and more detailed budget hearings over the coming weeks; staff told members to coordinate with analysts assigned to their work groups before those hearings.