Little presents “State of State” for Idaho
Last Monday, Governor Brad Little gave his statutorily required “state of the state and budget” address to the public. From the capitol rotunda, Little acknowledged potential budget strains anticipated this year, vowed to retain levels for education funding and vocational training, and offered continued support for the Trump administration agenda. During the course of the speech, Little noted some of the places where “budget pressures” would likely lead to cuts.
The speech initiated the state’s 69th legislative session, which will last until at least late March unless it is extended, as it has been several times over the last few years. Idaho’s two-term governor celebrated the state’s strong economic position and aligned some of Idaho’s positions with Trump administration actions. Idaho remains one of the states in which the president’s approval rating is at a net positive.
“Last year, in the Oval Office, I spoke with President Trump about how Idaho exemplifies his vision of America,” Little’s speech stated. “We’re tough on crime. We protect the unborn. We eliminated CRT and DEI, and we led the nation in preventing men from competing in women’s sports. We also talked about how Idaho advances his Talent Strategy for America through Idaho LAUNCH. Together, we are putting the American worker first. Innovative workforce training programs power a modern economy, reinforce America’s competitive dominance over China, and help Idaho workers earn more and afford more.”
Budgetary issues dominated the speech. As last year wound down, economic forecasters began projecting a budget deficit of over $500 million for the state in fiscal year 2027. Idaho’s constitution requires a balanced budget, and Little’s address attempted to walk a line between cuts in some areas and retaining promised funding for programs such as LAUNCH that he deemed “foundational to Idaho’s long-term prosperity,” he said. He proposed a $5.6 billion budget for fiscal year 2027, just slightly under the $5.66 billion budget this fiscal year.
He asked the legislature to leave spending for K-12 education and the Idaho Launch program untouched. Launch, started by Little in 2022, gives grants to help high school graduates access higher education. The program has since been scrutinized in the Idaho Legislature for various reasons. The program functionally provides vocational and technical training opportunities for all students, but especially create funding for students less likely to pursue traditional 4 year degrees.
While Little proposed leaving K-12 education spending the way it is, to make up the difference, he proposed extending 3% budget cuts he ordered almost every executive-branch agency to make in the current fiscal year, which he projected would save the state about $120 million.
In the budget proposal, Little called for the Idaho Department of Health and Welfare to maintain a 4% cut to its reimbursement rate for providers taking Medicaid patients — though he emphasized that he would not support the elimination of the state’s Medicaid expansion program, which provides health care coverage to about 90,000 lower-income Idaho residents. It is unclear whether both of those positions can simultaneously be put into practice.
Little proposed to hold state employee pay flat for fiscal year 2027, which starts July 1, though the state would not increase employees’ health insurance premiums even as its own cost has increased about 15%. Depending on the increases in insurance premiums over the year, and whatever happens at the national level with the ACA expansion, this may end up being one of the most strained pressure points in the plan, analysts have suggested. Little also called to eliminate funding for over 100 state jobs that have been unfilled for six months or more, which he predicted would save the state about $20 million.
Little stated that these and other proposed cuts would offer a path to a balanced budget without dipping into the state’s “rainy day” funds, and they would allow the state to conform with tax breaks offered in federal tax code. Little acknowledged that the tax breaks would cost the state up to $155 million in lost revenue — but he has made it a priority regardless. “The [tax cuts] will preserve the core principles I have long advocated for in Idaho’s tax system — simple, fair, predictable, and competitive,” he said. Idaho typically aligns its state tax code closely with the federal one, but doing so this year could result in added budgetary pressure across the state.
The governor’s largest proposed cuts are one-offs, including $275 million to a fund for state and local projects and $100 million in budget-stabilization, water-quality and other funds. The $100 million is interest earnings that normally would have stayed in those funds to support their future spending.
Little also noted the impending celebration of America’s 250th year since declaring independence, stating, “For two and a half centuries, the United States of America has been defined by the idea that freedom and opportunity belong to all. As we look to the future of our great country, this same idea will unite us as it always has. On this 250th commemoration of our country’s birth, let’s recognize and thank the generations who built this nation and those who defend it today –our active military members and veterans.”
Plans are underway across Idaho to commemorate the 250th in different ways, which we will keep you apprised of as those dates develop. As soon as the first week is in the books, we will bring you reports from the legislators representing the interests of southeast Idaho.
