Idaho Legislature’s budget committee kills federal funding for home energy rebates

The door to the JFAC committee room at the Idaho State Capitol building is pictured on Jan. 6, 2023. (Otto Kitsinger for Idaho Capital Sun)

The Idaho Legislature’s powerful budget committee on Wednesday refused to accept $24.6 million in federal funding to provide rebates to Idahoans who improve energy efficiency in their homes.

The Joint Finance-Appropriations Committee, or JFAC, passed the Idaho Office of Energy and Mineral Resources’ fiscal year 2026 budget enhancements after zeroing out a request from that office and Gov. Brad Little to authorize $24.6 million in federal funding to provide rebates to Idahoans.

Little made the request to start the Home Energy Rebates Program here. No state general fund money would have been spent under the program.

Funding was authorized by the federal Inflation Reduction Act.

“The rebate programs will help American households save money on energy bills, upgrade to clean energy equipment and improve energy efficiency and reduce indoor and outdoor air pollution,” according to the Idaho Office of Energy and Mineral Resources website. 

Idahoans could have accessed a total of $80.8 million in federal funding for rebates through 2031, state officials said. Instead, the program is totally dead in Idaho, and the state has to send the money back to the federal government. 

The money Idaho is passing up won’t be available to reduce the national debt or to cut taxes. Instead, Idaho’s money will go to other states that do participate in the program. 

“Under current federal law, states who decline to participate have their funding share reallocated to participating states,” Idaho Legislative Services Office budget analyst Kellen McGurkin told JFAC members Wednesday.

Sen. Jim Woodward, R-Sagle, said he supports the Home Energy Rebates Program but made the motion to pass the Office of Energy and Mineral Resources budget without the funding included because he did not think the budget would pass with the money included.

“So you’ll notice the motion that I just made does not include the Home Energy Rebates Program, which I would certainly support, but based on conversations, I have not heard the support for it,” Woodward said.

None of the members of JFAC said Wednesday why they opposed the Home Energy Rebates Program.

Sen. Janie Ward-Engelking, D-Boise, made an unsuccessful attempt to pass the budget with the funding for the program, but she was out-voted by the Republican supermajority.

“The vast majority of these funds would go directly to Idaho households and businesses,” Ward-Engelking said. “These are seniors, veterans, disabled (Idahoans) that are struggling to stay in their homes because property taxes have gone up. This allows them to get their homes energy efficient so that they can lower their energy costs. It’s very beneficial, and the funding requires zero state match.”

“Idahoans should get the benefit of their tax dollars helping them,” Ward-Engelking added.

This year, Idaho legislators have passed a major income tax reduction, a property tax cut and an expansion of the grocery tax credit, which reduce states revenues by a combined $403 million.

Since passing the $253 million income tax cut on March 4, some JFAC members and legislators have begun zeroing out some federal grants and scaling back on Little’s initiatives.

For example, on March 7 in JFAC, Sen. Cindy Carlson, R-Riggins, led the effort to zero out a $2.5 million request for Digital Access for All Idahoans grants that would have paid for laptop and desktop computers in more than a dozen rural and remote Idaho libraries. The program was intended to help provide internet access to Idahoans who face barriers. But Carlson said the grant program contains elements of diversity, equity and inclusion and could have benefited people who don’t speak English.

Then, on March 12, JFAC zeroed out a $500,000 request from Little to expand the Rural Physician Incentive Program, which is a program designed to recruit physicians to work in underserved communities by providing $25,000 a year to help repay their medical school debt. Before voting against the Rural Physician Incentive Program, Rep. Josh Tanner, R-Eagle, asked, “Where is enough enough within some of these programs?”