JFAC adopts one-time transfers to buffer revenues

BOISE — Since the start of the legislative session, the co-chairs of the Joint Finance-Appropriations Committee have spoken against Gov. Brad Little’s recommendations for a series of one-time transfers to balance the state budget, casting them as “gimmicks” that left the state budget unbalanced.

In a Wednesday meeting, however, these methods were framed as a way to right Idaho’s budget picture as the legislative session nears its close.

Despite past reservations from committee co-chairs Sen. Scott Grow, R-Eagle, and Rep. Josh Tanner, R-Eagle, on employing these methods to balance the budget, JFAC passed 14 separate cash transfers, several of which were similar to those initially recommended by the Governor’s Office at the start of the session under the “Enduring Idaho” plan.

In total, the cash transfers approved by JFAC amounted to $131.8 million for fiscal year 2026 and $95.4 million for fiscal year 2027. They included respective 4% and 5% cuts to legislator compensation for this fiscal year and the next. 

In decisions impacting various funds within the Idaho government, JFAC approved interest transfers for fiscal year 2027 from the Budget Stabilization Fund, the Department of Environmental Quality’s Water Pollution Control Fund and the permanent building fund, the last of which differed from Little’s recommendations.

Also differing from Little’s recommendation was the inclusion of a clause that each transfer could be made only to ensure the state’s general fund has a $150 million cash buffer heading into the next fiscal year.

Tanner said the hope is that state revenues “come in great” and that many of the transfers will not be needed to reach the desired $150 million cash buffer.

A new transfer recommendation forwarded by Tanner moved $13 million from the Idaho Broadband Fund to the general fund for fiscal year 2026.

Though $35 million was originally appropriated to this fund, Keith Bybee, budget and policy division manager of the Legislative Services Office, said it has largely gone untouched in the wake of an influx of federal dollars. These included funds from the Coronavirus Relief Fund Act, the American Rescue Plan Act and the Infrastructure and Jobs Act.

Bybee said this leaves $21 million within the broadband fund, $20 million of which will go toward broadband projects.

JFAC also moved to transfer $65.7 million in interest earnings from the American Rescue Plan Act. Half of this amount will go toward the fire suppression deficiency account for fiscal year 2026, supporting wildfire operations for the first half of this fiscal year. 

The remaining $32.9 million will go toward the Idaho Transportation Department’s (ITD) Strategic Initiatives fund in fiscal year 2026. In the next fiscal year, however, this ITD fund could face interest transfers totaling $12.9 million from both the state and local road project funds, if needed, to ensure a general fund balance of $150 million.

Speaking to the transfers to fire suppression and ITD’s strategic initiatives for the current fiscal year, Tanner said the aim was to “plug some of the holes left by the governor — one in fire and one in roads.”

Each of the transfers received unanimous support from Tanner and Grow, who last month hosted a press conference outlining their differences with Little’s budget recommendations, with the key sticking point being the various one-time transfers in his budget used to achieve balance for this fiscal year and the next.

The shift to utilizing these one-time transfers was noted by Rep. James Petzke, R-Meridian, who voted against the interest transfers impacting state agencies and budget stabilization funds.

Petzke said he was "surprised" that the body was bringing these transfer recommendations forward now, after indicating that Little's recommendations in this area would not be implemented for most of the session.

Tanner said the key distinction between the decisions made Wednesday was that they were made at the back end of the session to ensure an end-of-year budget surplus, rather than being implemented to achieve a net positive budget at the outset.

"We're not using it from a structural standpoint to build our budget off of," Tanner said. "We're using it as a kind of cushion."