Governor's executive budget emphasizes education increases, transportation and wildfire funding; public defense cost flagged

Laurie Wolf, administrator of the Division of Financial Management, presented Governor Brad Little’s executive budget to the Joint Finance and Appropriations Committee on Jan. 8, outlining what she described as a “keeping promises” budget that prioritizes education, infrastructure and state reserves while holding a $100 million set-aside for tax relief.

The executive recommendation projects general fund revenue of about $5.9 billion for fiscal 2025 and $6.2 billion for fiscal 2026, leaves an ending balance of roughly $383 million in FY25 and a projected ending balance of about $227 million for FY26 after proposed transfers, and includes sizable transfers to reserve accounts. Wolf said the governor recommends a $59 million transfer to the budget stabilization fund and a $50 million transfer to a public education stabilization fund; after those transfers the state’s revert reserve would total about $1.4 billion, or roughly 22% of the budget.

"Education is his top priority," Wolf told the committee, and the budget proposes $150 million in additional public school funding for FY26, including an $83 million allocation for teacher pay and nearly $30 million for teacher health insurance. The governor also set aside $50 million as a revenue adjustment for education choice initiatives that would require separate policy legislation to activate.

Transportation and infrastructure were next-highest priorities in Wolf’s presentation. The governor recommends $50 million to the Idaho Transportation Department for an expansion and congestion mitigation fund that Wolf said would enable additional bonding capacity; she told the committee that $80 million in TechEm funds previously generated $1.3 billion in transportation bonding and that the proposed $50 million would enable roughly $800 million more in bonding for high-value projects. Wolf also recommended a 3% increase to strategic initiative funds that support roads, bridges and local projects.

Workforce development proposals include $25 million for workforce training: $15 million in one-time grants, to be matched by private-sector funding, and $10 million ongoing to support career and technical education (CTE) capacity so colleges can accommodate more students.

Natural-resources and public-safety proposals were highlighted after questions from committee members. Wolf recommended a $60 million supplemental to replenish the fire suppression account for FY25 (to cover expenses from the recent fire season) and a $40 million ongoing appropriation in FY26 to stabilize the account going forward. She said the state’s five-year average annual fire suppression cost is about $40 million and that the state typically seeks to hold roughly $80 million in the suppression fund.

On cybersecurity, Wolf proposed a $10 million general fund allocation to the Information Technology Services division to address critical agency security and infrastructure replacements identified in IT resiliency reviews. She said several agencies could not cover all critical security needs within their 3% budget caps and urged the committee to consider the ITS-centralized approach for prioritizing replacements.

The presentation also addressed state public defense. Wolf said last year the legislature appropriated $52 million to consolidate public defense from a county-based to a state model effective Oct. 1. After a December state Supreme Court decision and operational realities Wolf said the Division of Public Defense’s FY26 needs increased; the governor recommends a FY25 supplemental of $5.4 million and an FY26 increase of $16.8 million, and Wolf said the total FY26 recommendation to support the state public defense is approximately $83 million while noting some policy choices remain about funding sources and transfers that could alter how the program is funded.

Other items in the governor’s request include $15 million one-time for the workforce housing fund, $850,000 one-time for about 18 medical residency positions plus $500,000 ongoing for a rural physician incentive program, $25,000,000 for workforce training and career-technical education capacity, and $500,000 to continue a fentanyl interdiction program. Wolf described the budget as conservative in revenue forecasting, structurally balanced, and oriented to both short-term needs and longer-term reserves.

Committee members pressed for clarifications on several topics during the question-and-answer period, including the mechanics and statutory basis for transfers to stabilization funds, the composition of the population-forecast adjustments in the maintenance budget, details about the transportation bonding capacity, and the structure and funding sources for state public defense. Wolf and LSO staff offered to provide supplemental charts and prior GEAR (Governor’s Emergency Education Relief) fund usage to committee members on request.

Next steps: agency presentations begin in the committee’s schedule; staff and work groups will provide deeper dives on agency maintenance budgets, replacement items and enhancement requests before the committee begins setting program maintenance budgets later in January.