This article is part of Idaho Freedom Foundationโs special series highlighting our 2027 Freedom and Family Agenda, a conservative blueprint for a freer, stronger Idaho. Read the full agenda here.
Since Fiscal Year 2020 (FY20), Idahoโs budget has grown much faster than its growth in population and inflation would prescribe. Agencies are asking for $15.24 billion for Fiscal Year 2028 (FY28), up over 70% from the $8.96 billion they asked for in pre-COVID FY20.
Idahoโs government is already too large. Even so, a more-than-fair test would be to ask what the budget would be if it grew only by population and inflation over these eight years. That number would be $13.05 billion. FY28 requests are more than $2 billion above that target. Where did all this money come from and where did it go?
Most new spending went to federal welfare programs and other state-level schemes to interfere in the free market and pick winners and losers. The biggest growth came from Medicaid, most prominently the implementation of Medicaid expansion. The Medicaid budget alone is now $1.75 billion over what a pre-covid adjusted baseline would call for. Other examples of major growth include Idaho LAUNCH and workforce development programs, federal broadband schemes, water infrastructure projects, and other government bloat.
While most of this money is federal, which means it is simply coming out of your paycheck at a different stage, or, more precisely, the next generationโs paycheck due to our massive fiscal deficit, it still has implications for state spending and taxes. For instance, even with a 90/10 federal split, Medicaid expansion still costs over $100 million per year to Idaho taxpayers. The bigger risk: What happens when the federal money inevitably runs out? Federal entitlement schemes are bound to turn into state entitlements, and this pattern plays out all the time.
Enter the Rural Health Transformation Fund (RHTF). For Idaho, itโs a nearly $1 billion federal spending program to fund a โruralโ problem that doesnโt exist. This year, the bill to accept it was passed in the Idaho Legislature as a five-year stopgap to protect Medicaid from targeted cuts enacted in President Donald Trumpโs federal budget(although the program continues to grow in the aggregate). When the RHTF runs out, certain providers will no doubt come before the Legislature asking it to plug the billion-dollar hole. In short, when federal money shrinks or ends, programs rarely go away. The expectation of the entitlement or service remains, and lawmakers will find it politically expedient to shift the cost to Idaho taxpayers to protect themselves.
Agencies also have a bad habit of budgeting far more money than they need in order to protect themselves from cuts and move money freely between priorities without the oversight of the Legislature. For instance, in Fiscal Year 2026, the Idaho Department of Health and Welfare moved $5.7 million appropriated for foster care payments to other programs through transfer exemptions. Agency spending authority often exceeds needs, with total amounts across the government well into the hundreds of millions of dollars. The fact of the matter is that between government bloat and fiscal wizardry of agencies, there is plenty to cut without impacting the core constitutional services the state provides.
Idaho Freedom Foundationโs fiscally conservative budget provides for $2.2 billion in cuts to agency requests to right-size government agencies and spending. The next article details those cuts, and the final article shows where those savings should go โ to Idaho citizens in the form of tax reductions.
Fun fact: $2.2 billion would be enough to entirely abolish property taxes in Idaho!
