Governor’s budget keeps major commitments while bolstering reserves, DFM tells JFAC

Governor’s executive budget: Division of Financial Management Administrator Laurie Wolf presented the governor’s executive budget to the Joint Finance and Appropriations Committee on Jan. 8, outlining a plan that preserves a structural balance while funding education, transportation, water, wildfire response, workforce training and limited tax relief.

The administration projects general‑fund receipts of about $5.9 billion for fiscal 2025 and roughly $6.2 billion for fiscal 2026, and is recommending an ending balance of about $383 million for FY25 and $227 million for FY26 after proposed transfers and expenditures. ‘‘We took a conservative approach to how we put this budget together,’’ Wolf told the committee.

Why it matters: The budget emphasizes K‑12 and workforce investments that the governor has made central to his agenda while moving money into both the budget stabilization and public education stabilization funds. The administration also proposes one‑time and ongoing spending intended to address immediate pressures — wildfire suppression and aviation, water recharge projects, teacher pay and health insurance, expansion of career‑technical capacity, and cybersecurity — rather than relying exclusively on transfers or one‑off supplements.

Key numbers and priorities - Revenue and balances: The administration used a conservative revenue baseline for FY26. The FY25 revenue projection cited by DFM was approximately $5.9 billion; FY26 total revenue (including adjustments) was presented at about $6.2 billion. Wolf said the administration left a $383 million projected ending balance for FY25 and $227 million for FY26 on the at‑a‑glance summary. - Reserves: The governor proposes transfers that would bring the reserve balances to historic levels, including a roughly $59 million transfer to the budget stabilization fund and a $50 million transfer to the public education stabilization fund; DFM said those actions would leave the state with a roughly $1.4 billion revert reserve (about 22% of the budget), within commonly cited guidance on rainy‑day funding. - Education: The budget includes roughly $150 million for public schools (DFM summary). That includes $83 million toward teacher pay and nearly $30 million toward teacher health insurance. The governor also set aside $50 million in revenue adjustments for potential education choice initiatives contingent on future policy action. - Transportation: DFM recommended $50 million for a transportation expansion and congestion mitigation fund intended to leverage bonding capacity for high‑value projects. The administration described it as enabling roughly an additional $800 million in bonding for transportation projects, and DFM noted the State’s prior use of a bonding program tied to federal reimbursements and Techum funds. - Workforce and career technical education: The governor proposed $25 million for workforce training, split into a $15 million one‑time matching grant program for colleges (requiring private match) and $10 million ongoing targeted to Career and Technical Education (CTE) to sustain operating capacity as programs expand. - Natural resources and wildfire: The executive budget would backfill the fire suppression account with a $60 million supplemental in FY25 (to reimburse the fund for the most recent season’s costs) and add $40 million ongoing in FY26 to stabilize funding. The administration also proposed $30 million ongoing to the Idaho Water Resource Board for prioritized recharge projects and $5 million for aviation and early‑detection tools. Wolf said the FY25 supplemental was necessary because the fire suppression account had been largely depleted. - Cybersecurity and public safety: The budget includes a $10 million ITS proposal for statewide cybersecurity and infrastructure replacement; $500,000 for continuation of an anti‑fentanyl initiative; and roughly $3.4 million for additional prison security and contraband mitigation initiatives. - State public defense: Following consolidation of public defense to state administration on Oct. 1, 2024, and a December Supreme Court decision affecting obligations, DFM recommends a FY25 supplemental of $5.4 million and a FY26 enhancement of $16.8 million; Wolf said the total FY26 recommendation to support state public defense was about $83 million. She also noted policy questions remain about funding sources for the public defense fund, which currently receives a distribution from sales tax. - Housing: A one‑time $15 million workforce housing transfer was included to support housing supply in high‑need counties; DFM said prior funding (about $50 million ARPA) produced more than 1,100 units statewide.

Administration rationale and approach Wolf described the package as a ‘‘keeping promises’’ budget that continues the governor’s multi‑year emphasis on education, workforce development and infrastructure while aiming to be structurally conservative: maintain healthy ending balances, reduce dependence on large transfers where possible, and preserve funds for tax relief. ‘‘It’s not what we do in the bad years that puts us out of business, it’s what we do in the good years that sets us up for success,’’ she said.

Questions raised in committee Members pressed administrators on several items: the rationale and sizing for the wildfire supplemental and ongoing funding; how transportation bonding and Techum funds interact with ARPA and other one‑time sources; why the administration chose a modest $100 million placeholder for tax relief rather than a larger cut; and specifics about workforce housing targeting and GEAR fund use in prior rounds. Wolf and DFM staff said agencies and analysts would present further details in upcoming hearings and offered to provide a GEAR fund report and other backup documentation to the committee.

What the committee will do next DFM’s presentation was introductory; JFAC will receive agency presentations, analyst briefings and work‑group recommendations in the coming weeks as it moves to set program maintenance budgets and then consider enhancements. DFM and LSO enjoined members to use the committee’s SharePoint and the session‑record archive to review materials ahead of hearings.

Ending Wolf closed the presentation inviting questions and noting the administration’s readiness to work with the legislature on policy choices such as the public defense funding mechanism and the distribution of tax relief.