Little: 'Big, beautiful bill' could reduce revenue
May 6—In a visit to Lewiston on Monday, Idaho Gov. Brad Little said Idaho is in good economic shape but spending and tax cuts pending in Congress could leave the state vulnerable to reduced revenue.
Idaho has been among the fastest growing states in the country over the past few years and the Legislature has used budget surpluses as justification for significant tax cuts. During the recently adjourned 2025 legislative session, lawmakers passed tax cuts that will reduce state income by $453 million.
Little, who submitted what he called a conservative budget seeking much more modest cuts — about $100 million worth — signed those tax bills. On Monday, he said the as-of-yet unknown details of tax cuts being debated by Congressional Republicans — such as the possibility that taxes would not be collected on tips, overtime or social security benefits — will play a role in the state's income.
"We always adopt the federal tax code. We don't know what's going to be in that big, beautiful bill," he said referring to President Donald Trump's desire to extend tax cuts from his first term and fund his domestic agenda. "When we do that, our revenue projection might go down."
Nor does the state know the degree to which federal programs, some of which play outsized roles in the Gem State, may be cut. Little said Idaho does a good job in pitching in its own money to fund big-ticket items like schools, roads and infrastructure, and social safety net programs. But the federal government also helps pay for many of them and Trump is seeking to shrink the federal government's financial liabilities.
"Medicaid is a big one. If they change the FMAP (federal medical assistance percentage) — which is the federal government share of what they pay — if they change that a lot, that's going to be a big hit," Little said.
A federal budget blueprint calls for $880 million in cuts to Medicaid, a medical program for low-income and disabled people. Little said the state would seek a waiver for its Medicaid work requirement.
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"That might help us a little bit," he said.
Little said hypothetical revenue shortfalls would be softened by its savings account.
"We do have about 23% of our total state budget in a rainy day fund. It's not raining. We're the fastest growing state."
The governor touted the legislature's approval of more than $30 million to fund the Idaho Department of Water Resources and said it leaves the small agency in position to help the Lewiston Orchards Irrigation District in its long-term goal of drawing water from the Clearwater River, solve water supply problems on the Palouse and deliver water from Dworshak Reservoir to the Dworshak National Fish Hatchery.
Little said a new law will help shield Idaho's electricity companies and cooperatives from the sorts of lawsuits that have plagued some of the biggest investor-owned utilities in the West when power lines or other equipment cause fires.
"If you're a utility and you do everything right. You know you have your right-of-ways prepared. Your equipment is in good shape. There's going to be a limit to the amount of liability you have."
Barker may be contacted at ebarker@lmtribune.com.
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