Deficiency warrants and supplementals: how emergency spending and current-year adjustments work

Kellan McGurkin, budget and policy analyst with the Legislative Services Office, briefed the Joint Finance and Appropriations Committee on Jan. 7 about deficiency warrants, supplementals and rescissions and how the committee should treat current-year adjustments.

What deficiency warrants are: McGurkin explained deficiency warrants give some boards or agencies statutory authority to spend against the general fund for specified purposes without a prior appropriation. Practically, agencies or boards (often the Board of Examiners or Board of Land Commissioners) authorize an expenditure and the agency uses a deficiency warrant to cover immediate costs; the agency then requests a formal appropriation from JFAC to zero out the outstanding balance.

Common uses and limits: Historically the legislature has allowed deficiency-warrant spending for items such as dam safety, fire suppression and pest control. The statutory authority typically sets allowable purposes, approving bodies and often a maximum amount. McGurkin noted that the value of deficiency-warrant requests across five years has risen, with pest-control requests a consistent component of the increase; he said specific departmental details will be addressed during the Military and Department of Agriculture hearings.

Supplementals and rescissions: Supplementals are standard appropriations that adjust the current fiscal year's budget (fiscal year 2025 in the committee's presentation). They function like normal appropriations but take effect in the year they are granted; rescissions are reductions to current-year appropriations. McGurkin delivered the governor's recommended supplemental total of approximately $604.8 million across all funds, including about $98.8 million in general-fund supplementals; that total included a proposed $60 million transfer from the general fund to the fire deficiency fund.

Constitutional emergency clause and timing: The Idaho Constitution requires actions to generally take effect at fiscal-year end unless the legislation declares an emergency in the preamble. McGurkin reminded members they should decide whether a supplemental needs emergency language to take effect immediately or if it can wait until the close of the fiscal year.

Committee guidance and questions Co-chairs urged that supplementals be limited to true emergencies or unforeseen crises. They recalled a prior session with a very large number of supplementals and emphasized the committee's intent to restrict ad-hoc midyear increases to genuine, unexpected needs. Committee members asked whether immediate repairs (for example a leaking roof in a state building) would qualify; McGurkin said the agency and purchasing division must still meet procurement requirements and that a supplemental would follow the usual appropriation process, noting the committee ultimately decides if the item qualifies as an emergency.

Ending: McGurkin said members will see a compiled list of deficiency-warrant and supplemental requests in the legislative budget book and that he will stand for questions when those agency budgets are heard.