JFAC may want more holdbacks
BOISE — Idaho House and Senate Democrats released and responded to a letter directing state agencies to explore the impact of additional holdbacks beyond those ordered by Gov. Brad Little in the fall.
The letter sent by the Legislative Services Office on behalf of the Joint Finance Appropriations Committee’s co-chairs, Sen. C. Scott Grow, R-Eagle, and Rep. Josh Tanner, R-Eagle, directed state agencies to provide budget reduction plans accommodating potential 1% or 2% holdbacks.
Both are on top of the ongoing 3% executive agency holdbacks that Little ordered in August.
The letter instructs agency directors to identify the following in budget reduction plans:
• How budget reductions will affect the current workforce, and whether further reductions will require workforce reductions or furloughs
• When affected programs were initially added to the budget
• Whether an essential service is affected by further cuts
• Where efficiencies exist
Democratic leadership in the House and the Senate came out in opposition to the letter, stating in a release that the direction comes as Rep. Jeff Ehlers, R-Meridian, introduced legislation to conform to the federal tax cuts passed into law by the One Big Beautiful Bill Act this summer.
Senate Minority Leader Melissa Wintrow took issue with both the conformity legislation and the record state tax cuts of last year, which she said precipitated calls for agency spending cuts.
“Republicans created a budget mess with reckless tax giveaways tilted toward the wealthy, then imposed a 3% holdback that is already squeezing the services Idaho families pay for and expect,” Wintrow said in the release. “Now, Republican leaders are demanding another round of cuts in the middle of the year to make room for massive tax breaks for corporations and billionaires, including costly corporate write-offs that reward investments made outside Idaho.”
House Minority Leader Ilana Rubel similarly voiced concerns about the new tax conformity legislation.
"If lawmakers want to move forward with federal tax conformity, they should do the work in the open,” Rubel said in the release. “Put the real costs on the table. Be clear about who benefits and who is hurt. Then choose targeted provisions that help those who need it. Idaho can balance its budget without shifting the burden onto families and the most vulnerable among us. We should protect the basics people count on and stop writing blank checks for wealthy donors and corporate special interests.”
The letter comes after JFAC projected more optimistic revenues than Little's, but Tanner said Tuesday this was not indicative of a pullback from the committee's projection.
Earlier this month, the committee set revenue targets that exceed Little's by $152 million for this fiscal year and $137.4 million for fiscal year 2027. This improvement stems in part from a January budget monitor report showing state corporate tax revenues improving to $109 million above projections, a report Tanner noted was yet to be published when Little provided his revenue projection.
Since JFAC was privy to this report when setting revenue, this resulted in an expected buffer well above Little’s projections of a $32 million surplus for this fiscal year and a $25 million surplus for the next.
Tanner noted, however, that this improvement was before the House’s Revenue & Taxation Committee voting to introduce a bill implementing the One Big Beautiful Bill’s personal and corporate income tax cuts for the 2025 tax year. Though both Little and the conformity bill estimate the tax cuts will cost the state $155 million, the House’s bill seeks to implement them a year ahead of Little’s recommendation.
When taking these tax cuts and the improved revenue projection into account, the state would still be sitting at a thin margin of about $27 million for this fiscal year. The margin could be improved through spending cuts that address the “massive hole in ongoing funding” that persists in the wake of the Little holdbacks, Tanner said.