BOISE, ID – As Idaho lawmakers convened Monday for the beginning of a legislative session that will be marked by spending cuts, Republican and Democratic party leaders were in stark contrast regarding the budget situation.
Republican legislative leaders in the House say the projected budget deficits faced by the state are a good opportunity to trim the fat on state budgets, while Democrats point to large income tax cuts approved over the last few years that have created a “self-inflicted budget crisis.”
“This isn’t a big deal,” House Speaker Mike Moyle, R-Star, said Monday at a press conference. “It’s going to be easy to get through.”
Idaho Gov. Brad Little submits plan to balance state budget without repealing Medicaid expansion
The latest state reports show an estimated $40.3 million state budget deficit by the end of the current fiscal year, the Idaho Capital Sun previously reported. That deficit has been projected to grow to between $555.2 million and $1 billion for the next fiscal year.
“The Idaho Legislature blew it,” Assistant Minority Leader Sen. James Ruchti, D-Pocatello, said Monday. “It voluntarily reduced revenue year after year for five years.”
The non-partisan, nonprofit the Idaho Center for Fiscal Policy issued a report in November showing that the state Legislature’s income tax cuts over the last five years have reduced state revenue by a total of around $4 billion, the Sun reported.
Idaho Gov. Brad Little in his annual State of the State address put forth his plan to balance the budget, and said Idaho was well-positioned to “weather the revenue challenges ahead.”
Republicans eye tax relief, potential cuts of Medicaid
Within the first few weeks of session, lawmakers must decide whether or how to conform to federal tax changes made under the One Big Beautiful Bill Act passed by Congress. Those changes will reduce state revenue by over $100 million — although estimates vary widely.
“The Big Beautiful Bill has 39 components that deal with taxes, and I firmly believe the Legislature is going to conform with most, if not all of them,” Moyle said. “And that’s good, because it’s tax relief for all Idaho citizens. So we’re in good shape that way, and we will do that one first, and then we might look at some other stuff, but make sure that we conform to as many of those 39 as we can.”
Little on Monday proposed $45 million in Medicaid cuts, but not a full repeal of Medicaid expansion — the program approved in 2018 by voters through a ballot initiative to expand coverage to those who fell in the gap between traditional Medicaid coverage and those who qualified for subsidies to afford health care through the state health insurance marketplace.
Moyle signaled support for a potential repeal, saying its costs have increased.
“If we keep dumping all that money in the Medicaid hole, it’s going to have an effect on those other budgets,” he said. “So I hope we look at it, hope we discuss it, and maybe in those discussions we can come up with a path forward.”
Democrats call for repeal of school choice tax credit, use of rainy day funds, protecting expansion
The Idaho legislative Democratic leaders argued that the state’s budget concerns could be fixed by eliminating the $50 million school choice tax credit, a program approved last year that makes available $5,000 grants to be used for educational expenses such as private school tuition.
House Minority Leader Ilana Rubel, D-Boise, said the state should also consider using state reserves, known as the Rainy Day Fund, and postponing the $400 million total tax cuts approved last year until “we can afford it.”
The Democrats opposed cuts to Medicaid expansion because it would remove health care coverage for around 90,000 people, and that it would negatively impact the economy by removing the federal funds that go to the program.
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