A Conservative Budget Plan for Idaho

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A Conservative Budget for Idaho - IFF

Idaho Freedom Foundation Press Conference Summary

The Problem

The Budgeting Problem: The process rewards spending and expansion, not restraint. State spending has increased 60% in six years.
Self-Inflicted Deficit: A prior $2 billion surplus was used to grow government programs, leading to the current deficit.
Legislative Performance: The average Idaho Spending Index score in 2025 was 39% (lawmakers voted to expand budgets 61% of the time).
The Solution: Idaho government must learn to say "NO" to expansion and return to a limited role.

Fiscal Year 2026 Total Government Tax Collections

Chart showing Idaho's FY2026 Total Government Tax Collections

Tax Collections by Fund
General Fund	39.9%
Federal Funds	39.2%
Dedicated Funds	20.9%

Key General Fund Sources
Individual Income Tax	16.4%
Sales Tax	16.1%
Corporate Income Tax	5.4%
Other Taxes	2.0%

Fiscal Year 2026 Total Government Appropriations

Major Appropriations by Sector
Health & Human Services	42.6%
Education	30.3%
Economic Development	12.1%
General Government	5.4%
Public Safety	4.9%
Natural Resources	4.7%

Federal Portion of Appropriations
Health & Human Services	27.9%
Education	1.8%
Economic Development	5.7%
General Government	1.3%
Public Safety	0.1%
Natural Resources	2.4%

Chart showing Idaho's FY2026 Total Government Appropriations by category

2026 State Tax Rankings

Graphic showing Idaho's 2026 State Tax Ranking at #9 relative to surrounding states

Our Analysis: There's More Work to Do

Idaho is ranked #9 in state tax burdens, indicating a significantly higher tax burden compared to neighbors like Wyoming (#1) and Nevada (no income tax).

This ranking proves Idaho has considerable work to do to achieve true fiscal conservatism and meaningful tax relief for its citizens, especially given the state's rapid growth.

Idaho's Budget History

Post-Recession Growth: After the 2008-2009 recession, Idaho rapidly and continuously increased government spending.
COVID Spending Continuation: Federal COVID-era funding was intended for one-time projects, but the state continued that elevated spending level, creating ongoing, unsustainable obligations.
ARPA Violation: The current trajectory violates Idaho Code § 67-3533, which requires planning for the reduction of one-time federal funds to avoid shifting burdens to the General Fund.
Mandate: The only correct response to the current fiscal imbalance is bold spending reductions, returning to pre-COVID spending baselines.

Introducing: The IFF Conservative Budget Plan ($1.88B in Cuts)

We propose a budget that cuts nearly $1.88 billion from the FY2027 agency requests (totaling over $14.51B) to stabilize state finances and return to inflation and population-adjusted pre-COVID spending levels. This reduction could amount to $2,500 in tax savings per Idaho household.

Overview of the IFF Conservative Budget Plan

Handout front detailing the IFF Conservative Budget Plan

Anatomy of $1.88 Billion in Recommended Cuts

Chart showing the four components of the $1.88 Billion in cuts

The IFF Conservative Budget totals $12.63 Billion. The $1.88 Billion in reductions is based on four pillars:

$1.32 BILLION

Medicaid Expansion Repeal

The most alarming trend; unsustainable growth three times the original cost estimate. Eliminates subsidizing the able-bodied.

$288 MILLION

Targeted Bloated & Wasteful Programs

Cuts to bureaucratic/unnecessary agencies and inefficient government giveaways (e.g., LAUNCH).

$189 MILLION

Cuts to Fastest-Growing Agencies

A 6x larger cut (18%) than the Governor’s holdback for agencies that have grown significantly faster than population and inflation.

$83 MILLION

3% True General Fund Cut

Applying the 3% cut across all General Fund agencies/programs, including schools.

Actual Budget vs. IFF Conservative Budget (FY2020-2027)

Line graph comparing Historical Total Appropriations, Appropriations without Medicaid Expansion, and the IFF Conservative Budget

This chart compares three budget scenarios over time:

Historical Total Appropriations: Shows rapid, aggressive spending growth.
Total Appropriations w/o Medicaid Expansion: Shows slightly reduced growth trajectory.
IFF Conservative Budget: Shows a stable, lower trajectory based only on inflation and population growth (excluding Medicaid expansion).

The $1.88B reduction is the difference between the Historical Total Appropriations and the IFF Conservative Budget requests for FY2027.

Structural Budget Reforms

This detailed handout provides a full breakdown of proposed reductions by agency, division, and department.

Handout back detailing specific budget reduction targets and structural reform goals

Beyond Cuts, We Need Structural Change

Ban Off-Budget Spending & Limit Continuous Appropriations: To make government spending comprehensively tracked and accessible.
Cease Fund Siphoning: Stop diverting sales tax revenue before it reaches the General Fund.
Restore Legislative Power: The budget process must start and end in the legislature, as granted by the Constitution (Power of the Purse).

Data sourced from DFM and IFF analysis.

Idaho Freedom Foundation
802 W. Bannock Street, Suite 405, Boise, Idaho 83702
p 208.258.2280 | e [email protected]