DFM presents governor’s 'keeping promises' executive budget to JFAC; ends with $227M projected FY26 balance

Division of Financial Management Administrator Laurie Wolf presented Governor Brad Little’s executive budget to the Joint Finance‑Appropriations Committee on Jan. 8, outlining a plan the administration described as a “keeping promises” budget that balances investments in education, infrastructure and natural resources with conservative revenue assumptions and larger reserve balances.

The nut graf: DFM recommended spending increases to education, workforce training and water and fire management while preserving a structurally balanced plan that leaves a projected FY26 ending general fund balance of about $227 million and directs funds into statutory stabilization accounts.

Wolf told the committee the administration used conservative revenue forecasting and left a planned FY25 ending balance of roughly $383 million with a FY26 total revenue projection near $6.2 billion. The presentation proposes transfers under statutory limits, including a $59 million transfer to the budget stabilization fund and a $50 million transfer to the public education stabilization fund; after those transfers, DFM estimates the state will hold a revert reserve of roughly $1.4 billion.

Key figures in the presentation include a recommended $151 million in total enhancements for FY26 (about $129 million ongoing), maintenance cost increases driven by employee benefit cost growth (per‑employee health/benefit assumptions rising from roughly $13,000 to $14,300, producing about $42 million in additional employer costs) and population‑driven adjustments of roughly $80 million.

Education: Wolf said the governor recommended an additional $150 million for public schools, including a $50 million allotment for rural school facilities, mental‑health resources and accountability for learning/literacy. The governor proposes about $83 million targeted to teacher pay and nearly $30 million toward school health insurance costs. Wolf also said the proposal sets aside $50 million in revenue adjustments for education choice initiatives contingent on a separate policy bill.

Transportation and infrastructure: the budget would place $50 million into a transportation expansion and congestion mitigation fund intended to preserve bonding capacity for high‑value projects once the department’s current bonding authority is exhausted. DFM staff told the committee that ITD’s TechEM program previously produced about $1.3 billion in bonded projects and that an additional $50 million could support up to roughly $800 million in additional bonding for priority projects. The governor’s budget also recommends a 3% increase to strategic initiatives funding, raising the annual total toward $312 million.

Workforce and education‑to‑career: the governor recommends $25 million for workforce training: $15 million one‑time grants (block grants requiring private match) to expand capacity at community and technical colleges and $10 million ongoing for career‑technical education operating costs.

Natural resources and fire/water response: DFM recommends a two‑part approach to wildfire funding that the presentation described as $60 million supplemental in FY25 to backfill a largely depleted suppression account and $40 million ongoing for FY26; an additional $5 million was earmarked for aviation and early detection tools. Wolf described the supplemental as necessary because the suppression account had been drawn down to low levels. The administration also recommends $30 million ongoing for the Idaho Water Resource Board to help prioritize recharge projects and other water investments.

Public safety and cybersecurity: the governor’s budget includes $10 million in general fund support for statewide cybersecurity infrastructure and replacement of critical IT security systems and $500,000 ongoing to continue the fentanyl task force program. Corrections requests include approximately $3.4 million in prison‑related investments, including contraband detection and transportation‑security measures.

State public defense: Wolf said the state transitioned public defense from county to state operations on Oct. 1 and that costs and a December Idaho Supreme Court decision increased projected outlays. The governor recommended a supplemental of $5.4 million for FY25 and about $16.8 million for FY26 to support the consolidated system; DFM noted the public defense fund is currently funded through a distribution tied to online sales tax and that further policy decisions are needed to determine ongoing funding mechanics. Wolf said the total FY26 recommendation to support state public defense is about $83 million (including prior appropriations and the supplemental request).

Health care and workforce: the budget includes a modest investment to address physician shortages: $850,000 in one‑time funding to support medical residency positions (estimated to fund roughly 18 residency slots in Boise) and $500,000 ongoing for a rural physician incentive program. Department of Health and Welfare proposals include funds for foster‑care reform; agency staff will present details during their hearings.

Fiscal posture and reserves: Wolf emphasized that the administration left conservative ending balances and recommended transfers to statutory stabilization funds. She said the state’s revert reserve would be at a record level if the transfers are made, which the administration argues helps maintain the state’s credit profile and prepares Idaho for economic fluctuations.

Ending: Committee members asked follow‑up questions on specific provisions—including the size and intent of wildfire funding, transportation bonding capacity and the public defense supplemental—and Wolf told members DFM and agency staff will provide additional details during the scheduled agency presentations. No formal committee votes occurred during the Jan. 8 presentation.