BOISE, ID – Republican Idaho legislative leaders said Thursday they will try to set a revenue projection earlier in the upcoming 2026 legislative session as they work with Gov. Brad Little to navigate revenue shortfalls and pass a balanced budget.

Setting a revenue projection is an important step in the annual budget setting process legislators undertake because the Idaho Constitution prohibits the state from running a deficit where expenses exceed revenues. Without a revenue projection, legislators don’t have a clear estimate of how much money the state can afford to spend while setting state agency budgets.

“We’re going to try to tackle the revenue projection right away,” Senate President Pro Tem Kelly Anthon, R-Rupert, said Thursday at the Idaho State Capitol in Boise.

Last year, legislators waited to set revenue projection until late in the session

But last year, legislators did not set an official revenue projection to base the state budget around until March 5, which was 59 days into the legislative session. By that point, legislators had already passed major tax cuts and set major budgets before they set the revenue projection – a move that was criticized by some members of both political parties.

But Anthon – the top ranking Republican in the Idaho Senate – said legislative leaders don’t want to wait that long during the 2026 Idaho legislative session, which begins Monday.

“We’ve decided, as majority leadership, to try to do a better job this session (by) really hitting the revenue projection early and to work better with the governor’s office to try to get to that revenue number quickly,” Anthon said. “We’ll see how that goes, but that is the goal.”

Balancing and setting the state budget is likely to be one of the top issues during the 2026 legislative session.

For years, Idaho has enjoyed consecutive budget surpluses as high as $2 billion.

But after five years of the Idaho Legislature passing income tax cuts that reduced state revenue by up to $4 billion, Idaho is facing projected budget deficits in the current fiscal year 2026 and next year in fiscal year 2027.

The latest projection for the current year projects a state budget deficit of $40.3 million.

For fiscal year 2027, one state estimate projected a state budget deficit of $555.2 million. 

Those projections do not include the added cost of complying with federal tax changes championed by President Donald Trump in the federal One Big Beautiful Bill Act, which would reduce state revenue even further if adopted at the state level.

During a press conference with reporters on Thursday, Little offered a preview of the annual State of the State address, which he will deliver Monday during the first day of the 2026 legislative session.

Little told reporters he will propose a balanced state budget, and he has committed to Trump that Idaho will conform with the tax changes from the One Big Beautiful Bill Act – changes that include no tax on overtime pay or tips for workers, an expanded deduction for seniors and no tax on borrowers’ car loan interest.

“There is one new pledge I’ll give you right now – we are going to propose a balanced budget,” Little said.

“I did commit to the president when I met with him that we were going to implement compliance (with the Big Beautiful Bill’s tax changes), and so that’s kind of where I’m coming from,” Little added.

Idaho governor says he is not looking to repeal Medicaid expansion

While House Speaker Mike Moyle, R-Star, said earlier this week he is open to the idea of repealing Medicaid expansion as a tool to reduce state spending, Little told reporters Thursday that he is not looking to repeal Medicaid expansion.

Little cautioned against repealing Medicaid expansion, which more than 60% of Idaho voters approved in the 2018 general election. Little said there would be unintended consequences to repealing Medicaid expansion and said the state took away some of the safety nets that had been in place prior to Medicaid expansion, including the Catastrophic Health Care Fund, or CAT Fund, that provided care for indigent patients with no other health coverage.

“If you look at Medicaid, there’s all kinds of unintended consequences,” Little said. “The raw number for repeal is not the actual number, and the Department of Health Welfare is working on that.”

When asked, Little stopped short of saying he would veto a bill seeking to repeal Medicaid expansion. Instead, Little said he doesn’t comment on what he will do with bills before they arrive on his desk.

While Little said he was not looking to repeal Medicaid expansion, House Minority Leader Ilana Rubel, D-Boise, said she is still deeply concerned about the impact of the budget cuts Idaho legislators will make to balance the budget.

“We are in a hole,” Rubel said. “There’s no question about it. We are $555 million below what we need to cover the most basic maintenance budgets to keep the lights on in our agencies.”

Rubel said Idaho has a self-inflicted revenue problem, not a spending problem. Rubel urged Little and the Idaho Legislature to balance the budget by increasing revenue through repealing last year’s income tax cuts and the passage of the new education tax credit, which reimburses families for education expenses including tuition at private, religious schools.

“We don’t have a spending problem,” Rubel said. “There is no fat to cut. In fact, we already fund things at such an incredibly low level that it’s costly in and of itself.”

On Thursday, Little did not reveal any of the specific budget initiatives or cost-cutting measures he will recommend to the Idaho Legislature. Instead Little asked Idahoans to wait for Monday’s State of the State address, when he said he will unveil his proposals.

Little is scheduled to deliver the address to the Idaho Legislature at 1 p.m. Mountain time Monday at the Idaho State Capitol in Boise. The address will be streamed live online, for free, via the Idaho in Session service.

Idaho Capital Sun is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Idaho Capital Sun maintains editorial independence. Contact Editor Christina Lords for questions: info@idahocapitalsun.com.