Budgets are moving forward, but Idaho Legislature does not know how much money it has to spend

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)

After eight full weeks in session, the Idaho Legislature still has not set a revenue projection to base the fiscal year 2026 budget around, despite the fact that legislators are moving forward with dozens of budgets and major tax cutting bills.

The Idaho Constitution requires the Idaho Legislature to set a balanced budget where expenses do not exceed revenues. 

The Idaho Legislature’s Joint Finance-Appropriations Committee, or JFAC for short, discussed revenue projections during the second week of the legislative session. But on Jan. 16, JFAC voted down two different revenue projections and decided to set revenues at a later date.

JFAC is a powerful legislative committee that meets daily to set all the budgets for every state agency and department.

Legislators wrapped up their eighth week in session on Friday and still had not set a revenue target.

On Feb. 20, Rep. Wendy Horman, the Idaho Falls Republican who serves as co-chair of JFAC, told the Idaho Capital Sun that she hopes JFAC will set a revenue target sooner rather than later.

“The House is ready to move, the Senate is not and that’s why there is a holdup,” Horman said Feb. 20.

When the Sun asked Horman on Friday for an update on where discussions about the revenue projection stand, Horman said the House members serving on JFAC may move forward even if the Senate members serving on JFAC are not ready.

“House Appropriations can find a way to meet separately to adopt a revenue number if the Senate is unwilling to take it up as a joint committee,” Horman told the Sun Friday afternoon.

Sen. Scott Grow, R-Eagle, who is the other co-chairman of JFAC, told the Sun late Friday afternoon he has not heard any discussion of House members voting separately on a revenue figure.

“There’s been no discussion really on that, and it’s the kind of thing that, with a joint committee, you always try to do things jointly,” Grow said in a phone interview. “There have been differences of opinion on the House and the Senate between the (revenue) numbers, and so we’re trying to work with individuals and see if we can get people to come together, because that’s always the best way to make things happen – get agreement.”

Grow said JFAC was slowed down for a few weeks earlier in the session when the committee couldn’t agree on raises for state employees. JFAC did eventually agree on raises for state employees on Feb. 6, but Grow said the slowdown also delayed action on setting a revenue projection. 

Grow told the Sun he hopes JFAC will agree on a revenue projection by March 7.

“I would love it if we could get it by next Friday,” Grow said. “Friday might be the day that it could happen, because we’re just doing budget setting, that kind of thing, on Friday.”

Unlike most committees in the Idaho Legislature, JFAC includes 10 members each from the Idaho House and Idaho Senate. Most other committees, such as the House Education Committee, only include members from one legislative chamber.

Until about two years ago, JFAC voted as one joint committee. It required a simple majority of votes (11 members out of 20 if all JFAC members were physically present) to pass a budget or motion.

But leading up to the 2024 legislative session, Horman and Grow unveiled a series of major changes to JFAC‘s budget and meeting procedures. 

Now, budgets are separated into different parts referred to as maintenance of operations budgets and budget enhancements.

JFAC’s daily meeting schedule has been reconfigured to include shorter daily public meetings and the addition of smaller working groups of JFAC members who meet regularly in private to draft budgets and craft motions.

Another major JFAC change has to do with how votes are counted. Instead of passing with a simple majority vote among all 20 members, budgets and motions need to pass with a majority of support from both the 10 JFAC members serving in the House and also the 10 JFAC members serving in the Senate. Horman said the change ensures there is support from both House members and Senate members before budgets advance to the floor of the full House or Senate. 

Grow said it takes six legislators from each chamber to constitute a majority, regardless of how many legislators are present and voting.

Changing the way votes are counted means that smaller groups of JFAC members can work together to kill budgets or motions before they reach the floor. Now, any five JFAC members from the House or any five JFAC members from the Senate can team up to kill a budget or motion. Before JFAC’s changes were launched, it took 10 members in JFAC to kill a budget or motion if everyone was present.

The impact of the voting rule change became clear during Friday’s JFAC meeting, when the committee considered more than 20 budget enhancements, supplemental funding requests or technical changes. Three senators serving on JFAC – Sens. Phil Hart, R-Kellogg; Glenneda Zuiderveld, R-Twin Falls; and Cindy Carlson, R-Riggins – voted against multiple budget enhancements or supplemental funding requests. 

Then Sens. Cody Galloway, R-Boise, and Carl Bjerke, R-Coeur d’Alene, joined Hart, Zuiderveld and Carlson, in voting against a $1 million request for body-worn cameras for the Idaho Department of Correction. Those five senators prevented the request to pay for body-worn cameras from receiving majority support among Senate members on JFAC, which resulted in a tied 5-5 vote in the Senate, even though House members on JFAC voted 7-3 to approve the body-worn cameras. Under JFAC procedures in place before 2023, the request for body-worn cameras would have passed 12-8, but Friday it failed to receive a majority and was then sent to the Idaho Senate – the body where it failed to receive majority support.

Things became even more confusing Friday when Grow stepped out of JFAC for several minutes and was absent for a handful of votes. Grow told the Sun he stopped out to present a bill in another committee. He then returned to JFAC a short time later.

But while Grow was away and not able to vote, Sen. Carl Bjerke, R-Coeur d’Alene, joined Hart, Zuiderveld and Carlson in voting against the $2.5 million Idaho Department of Correction community corrections budget for fiscal year 2026. Even though the vote among JFAC senators was 5-4 in favor of the community correction budget, legislative staffers announced the budget failed to receive majority support.

Grow told the Sun that is because it did not receive support from the majority of senators serving on JFAC, which is six. It wasn’t enough that a majority of senators physically present in the room voted to pass it. The community correction budget was then sent to the Senate because that is the body where it failed to receive majority support. 

Grow said it will be up to the Republican Senate leadership team to decide what becomes of the budget requests that failed to receive majority support among Senate JFAC members.

When the votes for all the senators and House members serving on JFAC were tallied, the vote on the community correction budget was 14-5 in favor, but it didn’t matter. It still failed to receive majority support from the 10 Senate members on JFAC.

Grow told the Sun that it takes six votes to constitute a majority among both senators and House members on JFAC, regardless of how many members are physically present. Grow said the process has been in place for a couple of years.

JFAC members – or members of Republican legislative leadership teams –  have also disagreed over rules that govern JFAC, so JFAC has not published official rules outlining the committee’s procedures and rules. Horman has told the Sun that JFAC instead operates under precedent. 

May Roberts, a policy analyst with the nonpartisan Idaho Center for Fiscal Policy, said it is unusual that legislators are moving forward setting the 2026 budget and proposing tax cuts that reduce revenue without first having a revenue projection in place.

“It’s usually set at the beginning of the legislative session, because that is what they will be budgeting against when they set the budget,” Roberts said in a phone interview. “It’s very unusual that decisions would be made without a revenue target in place. It feels a little like putting the cart before the horse making those decisions without having a revenue target in place.”

In a Feb. 20 interview at the Idaho State Capitol in Boise, Rep. Rod Furniss, R-Rigby, also said it is unusual not to have a revenue target in place. To put the issue in context, Furniss described things in terms of a household family budget. Furniss told the Sun he would never make large personal purchases or financial commitments, like signing a lease or paying for home repairs, without first knowing how much money he has available to spend.

“It sets a limit on the amount that we can spend, and so just like in your household, you wouldn’t go out and spend a bunch of money and then set your income limit (afterwards),” Furniss said. “That’s really the same concept that we have in the state, and we just need to set that so we know where it’s at.”

Roberts, who specializes in the areas of taxes, revenue and budgets, said the Idaho Center for Fiscal Policy, strives to provide the public with transparent information about the budget decisions that Idaho elected officials make. But without a revenue target, Roberts said it’s more difficult to track how the budget is shaping up or how much more money is available to spend.

“Our mission is to produce accurate information and analysis to inform the public about decisions that impact Idahoans,” Roberts said. “That kind of analysis is hard to provide when we don’t have a baseline to match it to.”

While there is not yet a revenue projection in place, Gov. Brad Little is concerned about the magnitude of tax cuts proposed by the Idaho Legislature and the amount of revenue those tax cuts would reduce.  

In his Jan. 6 State of the State address, Little called for setting aside $100 million for tax cuts.

But Republican legislative leaders have proposed more than $400 million in tax cuts through a combination of bills that reduce income tax rates for individuals and corporations, increase the so-called grocery tax credit to offset the sales tax Idahoans pay on food and shift money to funds used to reduce homeowners property taxes and pay for public school facilities.

• House Bill 40, lowers the individual and corporate income tax and reduces state revenue by $253 million.
• House Bill 304, shifts money to a state property tax reduction fund and a fund to pay for school facilities, reducing state revenue by $100 million.
• House Bill 231, increases the so-called grocery tax credit to offset the sales tax Idahoans pay for food, reducing state revenue by $50 million.

Each of those three bills reduce the amount of taxes Idahoans or Idaho corporations pay, but to do so they reduce revenue that would be available to the state for its budget.

Another bill, House Bill 93, which Little signed into law Thursday, provides Idaho families with a refundable tax credit for education expenses, including tuition at private, religious schools. That bill reduces state revenue by $50 million, bringing the total revenue reductions for those four bills to $453 million.

During a breakfast meeting Tuesday, Little told reporters he doesn’t think the state has enough money to do it all and still pass a balanced budget where expenses don’t exceed revenues. 

“I love the signal that every year in Idaho your tax burden is going to get less, but you’ve got to temper that with all those other things,” Little said Tuesday.

“If I would have thought we could do $450 (million in tax cuts), I would have proposed $450 (million),” Little said.