Idaho Gov. Brad Little orders budget cuts amid tax breaks, revenue shortfall
It was the first time since 2020 such cuts have been ordered, according to the Governor's Office.
The order cited the need to cut spending after Idaho lawmakers reduced income and property taxes by over 20%. The Governor's Office said the state must 'make way' for the tax cuts in President Donald Trump's 'Big Beautiful Bill.'
State agencies, including the Idaho State Police, Department of Correction and Department of Health and Welfare — which administers Medicaid — must reduce their general fund spending by 3% for the 2026 fiscal year, which began in July. They can consider consolidating services or agencies, eliminating vacant positions, cutting back on contract costs, and reviewing unused funds that are 'not critical' to operations, according to the order.
'Idaho will right-size government to match the means of Idahoans,' the order read.
In the news release about the order, the Governor's Office celebrated Idaho's strong and rapidly growing economy.
The Idaho Legislature this year made 'unprecedented' investments in school facilities, teacher pay and literacy, 'demonstrating we can have it all,' Little wrote in the order. 'We can simultaneously cut taxes while meeting the needs of a growing state.'
Idaho Democrats pushed back on that framing. Senate Minority Leader Melissa Wintrow, D-Boise, in a Friday news release said 'no amount of spin can hide the truth.'
'If Idaho's fiscal health were truly as strong as Republicans claim, there would be no need to strip funding mid-year,' Wintrow said. 'Ending this wasteful scheme will not close the hundreds of millions of dollars in budget shortfalls created by Republican giveaways.'
Idaho Democrats also pointed the finger at the GOP's passage of laws that cost more money, such as allowing public funding for private school tuition. Lauren Necochea, the party's chair, in another news release said the program blew 'a hole in the budget' and called the cuts 'the bill coming due for reckless Republican rule.'
'We were honest with Idahoans about where this budget was headed,' she said. 'Back in the spring, Democrats warned that Statehouse Republicans were budgeting dishonestly while the Trump regime was driving up costs and undermining our economy. The GOP ignored these warnings, and now Idaho families are paying the price.'
Though it expressed appreciation for Little's exclusion of public schools from the cuts, the Idaho Education Association in a release called them 'very unfortunate and completely predictable.'
'The Idaho Legislature's massive tax cuts easily foretold this outcome, even as lawmakers dismissed the needs of basic governing and Idaho's most vulnerable residents,' President Layne McInelly wrote. 'Idaho Education Association members believe Gov. Little is right to spare Idaho's public school students and classrooms from even more fiscal austerity while lawmakers write checks to the wealthy.'
In recent months, state revenues came in below forecasts set by the Legislature.
Little in February told reporters he worried that lawmakers' proposals to cut taxes were beyond what the state could afford. The Legislature cut taxes by $400 million and spent another $50 million on a tax credit for private education. Those bills, which Little signed into law, reduced revenue available for the state budget by about $453 million, the Idaho Capital Sun reported.
In his January State of the State address, Little called for a reduction of the fund by $100 million — less than a quarter of the Legislature's amount.
'If I would have thought we could do $450 (million), I would have proposed $450 (million),' Little said of the hundreds of millions more that lawmakers aim to return to taxpayers.
On Friday, Democrats called for a special legislative session to repeal the tax credit program, often referred to as school vouchers.
'It is an essential first step toward restoring fiscal responsibility,' Wintrow said in the release.
Idaho continues its 'historic' tax cuts. Here's what residents can expect
What will Trump administration cuts mean for Idaho? Gov. Little predicts 'economic shock'
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