BOISE, ID – Facing a significant projected budget deficit, Idaho lawmakers will have major spending and cutting decisions to make during the upcoming legislative session, Gov. Brad Little said Monday, though he remained seemingly optimistic.

Little, during an Idaho AARP telephone town hall, addressed questions regarding education, health care, immigration, and other issues.

“There’s going to be some significant decisions that the Legislature is going to make this year, but I would project that generally, the state will continue with their upward trajectory,” Little said. “Right now, we’ve already had to dial back spending a little bit, mainly to compensate for some of the tax bills that we did in previous years and the (federal) Great Big Beautiful Bill is going to have another impact.”

A recent Idaho Fiscal Policy Center report found that tax cuts over the past five years have reduced the state’s revenue by $4 billion since 2021, the Idaho Capital Sun reported.

The projected budget deficit for the current fiscal year is $58.4 million, the Sun previously reported. The projection does not include the impact of the federal tax and spending budget package, or “One Big Beautiful Bill Act,” which could result in an additional $284.4 million reduction in annual revenue, according to an analysis by the Idaho Center for Fiscal Policy.

The budget shortfall is estimated to increase over time, with one scenario shared with state budget committee members this month showing a potential $555.2 million deficit for fiscal year 2027.

Little said that about 22% of the state’s general fund is set aside in a rainy day fund for emergency use.

“I don’t think it’s raining. I think there’s some clouds out there, but I don’t think it’s raining,” he said. “… our ethos in Idaho is, don’t spend money we don’t have, save for a rainy day, be prudent about it, don’t grow government too much, and that’s what we’ll continue to do going forward.”

Little: Private school choice tax credit unlikely to increase this year

Two callers questioned the governor about the school choice tax credit approved in 2025, which set aside $50 million for a $5,000 per student credit that could go toward education expenses, including private school tuition. House Bill 93 allows families with incomes at or below 300% of the federal poverty level to receive the money in an advance payment rather than reimbursement later.

One caller questioned why Little signed the bill when more than 86% of those who contacted his office about the bill asked him to veto it, Idaho Education News reported

A Twin Falls resident asked, “Would you at least veto any increase, even if you won’t do anything about what you signed already?”

Little responded that he would “be very surprised” if the Legislature added money to the program, because it’s still in its infancy.

“We haven’t even started it yet, we’re just getting the rules in place to see how it works,” he said.

He also said he signed the bill because he proposed school choice legislation in his 2025 State of the State Address, and said the bill met enough of his requirements to be “contained” and “means-tested,” or targeted only at certain income groups.

The bill in its first year prioritizes families at or below the 300% poverty level, which for a family of four is an annual income of $96,450. However, in the later years, it prioritizes families who have previously received it.

He also received a question about the accountability guidelines in the legislation and not being “as stringent” as they are for public schools. The requirements under the bill include that the money goes to K-12 education “that includes, at a minimum, English language arts, mathematics, science, and social studies,” according to the bill language.

Little said the regulations on public K-12 schools are overly burdensome.

“I, frankly, think we ought to look at the rules we have for public schools and make them more akin to charter schools,” he said. “I’m all for that.”

Medicaid may face further cuts 

A St. Anthony resident, who said she had a child with autism and owned an agency that provided services to people with disabilities, questioned Little about the recent 4% cut to provider reimbursement rates for those who serve Medicaid patients. 

The Idaho Department of Health and Welfare announced the cuts in August, a week after Little directed state agencies to cut mid-year budgets by 3% in response to the projected budget shortfall.

Little said that the budget for the program had grown too much.

“As I look forward to Medicaid funding this coming year, it’s going to be a challenge again,” he said. “The bottom line is, the growth in Medicaid, both at the federal level and the state level, has been so large that it was just a matter of either terminating the program … or basically, dialing back the level of it so that my Medicaid budget balances, and we can live within the means we have there.”

He noted there’s “not going to be a lot of new money this year,” and that the state was awaiting decision making by Congress regarding health care premium tax credits, which help keep insurance premium costs lower for private insurance purchased through the state marketplace and are set to expire this year.

The congressional tax and spending megabill also included reductions in federal Medicaid spending of around $1 trillion over the decade.

Some lawmakers hope to address women’s health care shortage

A Lewiston resident said his adult children had moved out of Idaho because of a lack of job opportunities and because of Idaho’s strict felony abortion ban.

“It’s just not reasonable or logical that they can’t be treated for miscarriage in Idaho, if they have severe complications of pregnancy, they have to go out of state to get treatment,” the caller said.

Idaho’s law makes it a felony to provide an abortion in almost all cases except to remove a dead fetus, treat a molar pregnancy, prevent the death of the mother, and narrow circumstances involving rape and incest if a police report is provided in the first trimester.

A study published this year found that Idaho lost more than a third of its practicing obstetrician providers since the state’s abortion ban went into effect, the Sun reported.

Some Republican state lawmakers, including Rep. Mark Sauter, R-Coeur d’Alene, and Sen. Jim Woodward in the 2025 session, introduced legislation to add an exemption to the ban to protect the health of the mother, rather than prevent her death. None of the bills have received public hearings.

Little noted that women’s health has been an issue discussed since the bill went into effect upon the U.S. Supreme Court’s reversal of Roe v. Wade in 2022.

He said there are “well-meaning people that are talking about some changes to that legislation.”

“Idaho is never going to be a place where it’s a preferred place for abortions. That’s my position. That’s position the most Idaho,” he said. “But we want women’s health to be available at the highest level.”

Four ICE agents in Idaho, Little says 

A caller asked about immigration enforcement in Idaho, as it has escalated nationwide.

Little said there are four federal Immigrations and Customs Enforcement agents in Idaho.

The governor noted that the Idaho State Police has signed what’s called a 287(g) agreement with the  ICE. The state approved ISP to spend up to $300,000 from the governor’s emergency fund to transport undocumented people to ICE detention facilities for deportation.

Little said Monday the program is focused on people who have been convicted of separate crimes.

“After they go through their due process, rather than turning them back out on the street that they’re they’re sent to their home country,” he said.

Through this agreement, the state has transported more than 50 people to ICE detention centers. An analysis of criminal records by the Idaho Capital Sun found that most but not all had had convictions in Idaho, with some being charged and transported before their cases completed and a couple who had faced charges that were later dismissed.

This story first appeared on Idaho Capital Sun.