Idaho Gang of Eight: Understanding Idaho’s Budget

February 4, 2026

Understanding Idaho’s Budget
…and why things feel tight right now

By: Idaho Gang of Eight

Idaho’s budget is not just a big pot of money. It comes from several sources, including a large share from the federal government. Many Idahoans worry about cuts without a clear understanding of where the money comes from or how it is spent.

A few quick terms

Before looking at the charts, here are a few phrases you’ll see throughout any budget discussion:

Fiscal Year (FY): Idaho’s fiscal year runs from July 1 to June 30. FY 2026 covers July 2025 through June 2026.

Appropriation: Legal authority granted by the Legislature to spend money. It is not cash already spent.

Original appropriation: The starting budget approved by lawmakers, before carryovers or mid-year adjustments.

General Fund: Idaho’s main checking account, funded primarily by income and sales taxes.

Dedicated funds: Money collected for specific purposes and legally restricted to those uses.

Federal funds: Money from the federal government for specific programs, often with strict rules attached.

With that context, let’s look at the budget.

Where the money comes from (All Funds)

Idaho’s total FY 2026 budget is about $14.1 billion. When you break down where that money comes from, three things stand out:

• General Fund: ~40%
• Federal funds: ~39%
• Dedicated funds: ~21%

Nearly four out of every ten dollars Idaho spends comes from the federal government, not from state taxes.

Federal dollars are not free money. They come with strings that limit legislative control. The money comes from you, through federal taxes, and is backed by a federal government more than $38 trillion in debt. When a state depends on federal money, it gives up state sovereignty.

Where the money goes (All Funds)

When all funds are included, most spending is concentrated in a few areas:

• Health & Human Services: 42.7% of total spending, driven largely by Medicaid and other federally supported programs
• Education: about 30%
• Everything else: public safety, natural resources, economic development, and general government make up a much smaller share

What the state actually controls: the General Fund

Federal money makes up a large share of total spending. The General Fund is where lawmakers decide what to cut, what to fund, and what to leave out, using state tax dollars.

• Education: 61.7%
• Health & Human Services: 21.9%
• Public safety: just under 10%

Education and Health & Human Services take up most General Fund dollars. After they are funded, there is little left for everything else.

How the General Fund is funded

The General Fund relies heavily on just two sources:

• Individual income tax
• Sales tax

Corporate income taxes and all other taxes make up a much smaller share.

Idaho doesn’t have a revenue problem. It has a spending problem.

Idaho’s explosive budget growth

Idaho’s budget growth is the issue. In 2019, total spending was about $8.3 billion. By FY 2026, it reached roughly $14.1 billion — a 60% growth in six years.

Population didn’t increase by 60%, and neither did inflation.

The Governor’s budget shows ongoing spending commitments are higher than ongoing revenue. The gap is roughly $25 million in FY 2026, growing to about $100 million in FY 2027.

This isn’t a revenue problem. It’s a spending problem. It’s out of control.