In the last five years, Idaho’s state budget has increased by a whopping 55%. Yes, Idaho is a “red state” with a republican-dominated legislature, but you wouldn’t know it by looking at the spending spree coming from the capitol.
Like most states, Idaho’s new fiscal year began on July 1, 2024. It might sound a bit confusing to split the fiscal year over two calendar years, but it allows the Legislature to come to session in January, make adjustments to the current budget, and approve the budget for the next year within 3 months.
The problem with the process is that it gives the governor a major head start in the budget development process. The governor’s early January state of the state address boils down to, “Here is what I want you to approve; now go do it.”
This approach has not worked out very well for fiscal conservatives. So, the Legislature needs to grab the budget reins come January 2025!
Between state fiscal years 2020 and 2025, total original appropriations increased by 55%, from $8.96 billion to $13.89 billion. That’s a Biden-style increase, folks. Although the federal fiscal years don’t coincide with Idaho’s, if we compare the five-year pre-COVID to post-COVID growth, from federal FY19 to FY24, the federal budget is up 56%, virtually the same percentage increase.
It’s entirely fair to point out that Idaho is balancing its budget with federal funds — funds that are increasingly borrowed. Approximately 37% of Idaho’s spending in the FY25 appropriation comes from federal funds.
The legislative budget committee, the Joint Finance Appropriation Committee (JFAC), has worked hard to implement a promising new budget process, but it hasn’t saved money yet. While we remain hopeful that separating the appropriations into maintenance budgets that maintain current operations and enhancements that add new line items is a good concept, it needs a legislative push.
So, what kind of push? When COVID came along, it became a recipe for many things: mask and vaccine mandates, business closures, and general government heavy-handedness. It also unleashed a surge in government spending. Remember that prior to COVID, Idaho appropriated $9 billion. Well, at all levels, including direct payments to individuals, $22.9 billion came to Idaho with COVID.
And while we are no longer required to wear masks, it appears the appetite for big spending has not diminished. Some might argue that the appropriation increases included a lot of one-time spending as COVID funds flooded government coffers. If we review the ongoing state spending — spending using state general and dedicated funds — we get a clear picture of the transformation. From fiscal year 2020 to 2025, the base (ongoing) spending increased 42%. This number does not include federal spending. It is the state portion of the budget.
What this means is clear. JFAC must review the ongoing agency spending, not just new agency requests — something it has not done in years. The trend must be reversed, not merely slowed.
If Idaho is ever to be in a position to reject federal bullying in education and health care policy, it must first position the state government as less dependent on federal funds. This requires a smaller government overall. Next January, the Legislature should reduce overall state spending, not just rely on the extinguishing of COVID money to claim that spending is going down.
