Governor’s executive budget emphasizes education, transportation, wildfire funding and public defense; DFM presents conservative revenue outlook

Laurie Wolf, administrator of the Division of Financial Management, presented the governor’s executive budget to the Joint Finance and Appropriations Committee, describing a structurally balanced proposal that maintains healthy ending balances while recommending targeted enhancements and transfers. Wolf told the committee the governor’s “keeping promises” budget focuses on education, transportation, workforce training, water and wildfire management, cybersecurity and public defense.

The presentation stressed conservative revenue forecasting and reserves. Wolf summarized the budget’s headline fiscal posture: an FY2025 projected ending balance of about $383 million and an FY2026 projected ending balance of about $227 million after recommended transfers. The proposal includes transfers of $59 million to the budget stabilization fund and $50 million to a public education stabilization fund; DFM said those transfers align with statute and would leave a revert reserve balance it described as historically large (about $140 million, roughly 22% of the budget reserve cited in the presentation).

Wolf said the governor recommends $151 million in total agency enhancements (ongoing and one-time) and highlighted principal priorities:

- Education: Wolf said the governor “continues to make investments in children and their educational successes,” proposing an additional roughly $150 million for public schools that the presentation said includes roughly $83 million toward teacher pay and nearly $30 million toward school health insurance, plus $50 million set aside for school facilities in rural districts, mental-health supports, and literacy/accountability efforts. Wolf said $50 million in the proposal is reserved for education choice initiatives that would require a separate policy bill if pursued.

- Transportation: The governor proposes $50 million to the state’s transportation expansion/congestion mitigation fund to support bonding for additional high‑value projects. Wolf said the extra $50 million would allow bonding capacity for about $800 million in projects and that Idaho Transportation Department (ITD) will make a final bonding sale from Techum funds this spring.

- Workforce training and career/technical education: The presentation included $25 million for workforce development—$15 million one‑time for competitive grants that require private matching funds (to expand lab/classroom capacity, equipment and facilities at community and technical colleges) and $10 million ongoing directed to CTE for operating costs to serve expanded enrollments.

- Water and wildfire management: Wolf proposed a supplemental $60 million to backfill the fire suppression account for FY2025 (to replace costs spent fighting this year’s fires) and $40 million ongoing in FY2026 to stabilize that fund. The governor also recommended $30 million ongoing to the Idaho Water Resource Board for prioritized recharge and water projects.

- Cybersecurity and public safety: The budget recommended $10 million for ITS to address critical cybersecurity and infrastructure needs across state systems and $500,000 to continue a fentanyl reduction program; additional public‑safety investments and prison funding were listed for contraband control and related needs.

- Public defense: Wolf told the committee the state public defense consolidation created new costs. DFM described a supplemental request and additional FY2026 funding and said the total FY2026 recommendation to support state public defense is about $83 million. Wolf noted the program is funded through a public‑defense fund that receives a share of online sales tax distributions and that any long‑term change in that fund will require a policy decision about transfers or funding mechanisms.

Wolf emphasized the budget’s conservative revenue approach: staff used a conservative FY2025 revenue baseline while acknowledging recent months’ receipts had trended ahead of earlier forecasts. She also reviewed maintenance components (employee compensation, benefit cost adjustments, contract inflation and replacement items such as IT and vehicles) and told members agencies had been asked to prioritize critical IT security and resiliency items.

Committee members asked questions during and after the presentation. Among the points raised: - Several legislators asked for clarification about the fire funding—whether the $60 million backfill is a supplemental for the current year and the $40 million is ongoing; Wolf confirmed the $60 million is a supplemental and the $40 million is an ongoing FY2026 recommendation. - Members pressed about the $50 million transportation request, workforce housing funding, the GEAR grant history used to expand CTE capacity, and whether the governor would support childcare expansion if federal resources became available. - On public defense, Wolf said the FY2026 recommendation totals about $83 million and that the ultimate funding approach will require policy decisions because the existing public defense fund receives online sales tax distributions.

Wolf closed by summarizing strengths of the proposal: structural balance, conservative revenue forecasting, investments in education and core infrastructure, and record-level reserves.

Ending: Committee chairs and members thanked Wolf and her staff; members asked staff to prepare follow-up detail (for example, information on GEAR fund uses and the revenue-path assumptions) as hearings and work groups begin.