BOISE, ID – After they were originally protected from new state budget cuts, leaders of Idaho’s public school system and Medicaid program are being asked by state legislators to submit plans to cut their budgets by up to 2%, a new state budget memo shows.

Education leaders across Idaho expressed shock and disappointment as the Jan. 28 memo calling for public school officials to submit plans for budget cuts began circulating.

“Permanent cuts to the budget for current year and FY27 budgets would be direct hits to critical services that Idaho students and families rely on every day, likely resulting in cuts to programs, staffing, and more,” Idaho School Boards Association Executive Director Misty Swanson said in a written statement. “We are deeply concerned that the Co-Chairs (of the Joint Finance-Appropriations Committee) have reversed their promise not to cut the K-12 budget this year, including after saying such to both House and Senate Education Committees this week. These permanent cuts will negatively impact every community and student in Idaho and will leave lasting negative consequences on our K-12 schools.”

The Idaho Department of Correction is still excluded from submitting plans for additional new budget cuts because Sen. Scott Grow, R-Eagle, said officials did not want to risk furloughing or reducing the staff of prison guards.

Proposals for additional state budget cuts are necessary due to uncertainty surrounding conformity with ‘Big, Beautiful’ bill, JFAC co-chair says

Grow, who serves as co-chairman of the Joint Finance-Appropriations Committee, said in an interview Thursday that the memo calling on education and Medicaid leaders to submit plans for cuts was issued in response to ongoing uncertainty about the financial impact of conforming to federal tax cuts included in the federal One Big Beautiful Bill Act championed by President Donald Trump.

Grow also said the Idaho Constitution’s requirement to pass a balanced state budget and his own desire to leave a positive ending cash balance in the state budget to guard against additional financial uncertainty were factors in sending the memo.

“The challenge we have now is that even with that additional $153 million in revenue, now the estimated cost of the Big Beautiful Bill, the number we have for the individual (tax changes), is $155 million and then there’s additional costs for the corporate side and that is the big unknown,” Grow said in an interview at the Idaho State Capitol. “That is a challenge. We’ve heard numbers from zero to $80 million. And so how do you balance a budget with that much uncertainty and another hit that’s going to come to us?”

The $153 million figure Grow referenced comes from the revenue projection that the Joint Finance-Appropriations Committee adopted earlier this month, which was $153 million higher than the revenue projection that Gov. Brad Little issued for his budget proposal.

Grow said the memo calling on public schools to submit plans for budget cuts does not guarantee that the Idaho Legislature will actually cut the public school budget. Instead, Grow said public schools and Medicaid were invited to submit budget cutting plans so legislators would have the data.

“We don’t want to cut anything, but let’s at least let them start looking at it,” Grow said in an interview.

“If you read (the memo) carefully, it says one of the options is to further reduce budgets in ‘26 and ‘27 – that’s one option,” Grow added.

Grow also noted that the K–12 public school budget and Medicaid budget are the two largest budgets in the state. If the state’s two largest budgets were not part of the budget cuts, the new cuts could be harder on the smaller state agencies, and it could be more difficult to come up with significant overall savings to stabilize the state budget.

“That’s the elephant in the room, as you know,” Grow said.

“When you exclude Medicaid, you exclude the K-12 (schools) we’re talking about the large majority of our budget, those two right there,” Grow said. “So when those are excluded, that puts a heavy burden on all the other departments and agencies.”

Why is Idaho bracing for more state budget cuts?

For months, Idaho has experienced revenue shortfalls and a projected state budget deficit after years of passing tax cuts that reduced the amount of state revenue available to fund the state budget, the Sun previously reported.

Little ordered all state agencies other than public schools to cut spending by 3% last summer, and then made those cuts permanent, to avoid a budget shortfall.

Strong revenue collections in the month of December put Idaho back on track to have a projected budget surplus for the first time in months.

But Grow said he is still concerned about state revenue.

“It was going up and down and up and down and up and down, so we are very concerned,” Grow said. “I mean, we could be upside down next month – in two weeks.”

News of the Idaho Legislature asking for agencies to submit plans for additional new cuts broke Monday.

On Monday, JFAC leaders released a memo asking state agency directors to submit new plans for additional budget cuts of up to 2% to the state by Friday, Jan. 30, the Idaho Capital Sun previously reported.

On Wednesday, a newer, follow-up budget memo clarified that both K-12 public schools and the Medicaid program are required to submit plans to cut their budgets by up to 2%.

The new cuts of up to 2% would be added to the 3% cuts that Little ordered last summer, which could bring the total cost of cuts to 5% for most state agencies.

Some education leaders have noted Idaho is not in an economic recession and blamed the Idaho Legislature for creating the budget crunch by cutting taxes and revenues too deeply.

In a statement released Thursday, leaders of the Idaho Education Association said the Idaho Legislature should repeal the $50 million tax credit state legislators approved last year to reimburse families for education expenses including tuition at private, religious schools.

“In a year when every single dollar is so closely scrutinized and accounted for, why aren’t lawmakers paying attention to the most unaccountable public funds they have appropriated?” the Idaho Education Association said in a written statement Thursday. “Reallocating the $50 million from House Bill 93 would keep over-stretched public school budgets whole, as Gov. Little promised just a few weeks ago. Instead, some lawmakers want to double down on the reckless tax cuts they approved last session so they can use public dollars to pay private school tuition — with no accountability on how that money is spent.”

Idaho School Boards Association leaders also expressed deep concerns with asking public schools to submit plans to cut budgets.

“Going backwards in school funding at this critical time is a step in the wrong direction and Idahoans need to be very concerned,” said Swanson, the executive director of the Idaho School Boards Association.

Additional Budget Reduction Plans Memo – Pub Schools Medicaid

This story first appeared on Idaho Capital Sun.