Copyright Lewiston Morning Tribune
To comply with Idaho Gov. Brad Little’s directive to permanently extend 3% budget cuts, state agencies are planning to cut $88.7 million next fiscal year. As part of those extended cuts for fiscal year 2027, Idaho plans to extend 4% Medicaid provider pay rate cuts for another year. The Idaho Department of Correction also plans to cut costs to house prisoners — including for contracted medical providers or reducing drug testing for inmates. “The governor was pretty intentional about giving agencies the flexibility to decide where we could best find those holdbacks from spending and expenditures,” Little’s budget chief, Lori Wolff, told the Idaho Capital Sun in an interview. The governor exempted K-12 public schools from the cuts, but not higher education institutions. To offset $13.3 million in permanent cuts, many Idaho public colleges and universities are cutting dozens of jobs, Idaho Education News reported. State agency budget requests that show the proposed cuts are publicly available on the Idaho Division of Financial Management’s website. Extending Medicaid provider pay cuts could save $41.6M As a result of the budget cuts the governor ordered for this fiscal year, agencies expect to spend about $86.7 million less than they had planned, Wolff said. For next year, the state’s 2027 fiscal year, the expected cuts could grow to $88.7 million, she said. Some future cuts proposed by the Idaho Department of Health and Welfare and the Idaho Department of Correction aren’t tracked like normal budget cuts. Their cuts — to forecasted costs to cover populations the agencies are required to cover, like Medicaid enrollees and people incarcerated in prisons — don’t show up in the Division of Financial Management’s estimate for the total cuts across state agencies, which Wolff shared with the Sun. Extending 4% cuts to Medicaid provider pay rates accounts for almost half of the fiscal year 2027’s cuts, or $41.6 million, she said. In Health and Welfare’s other reductions, the agency is proposing nearly $7.4 million in cuts and cutting three jobs. The cuts are largely from trustee and benefit costs, which are costs from distributing benefits through programs like public assistance. The Idaho Department of Health and Welfare declined to comment on its budget cut plans for fiscal year 2027. The bulk of the Idaho Department of Correction’s ongoing budget cuts for fiscal year 2027 are nearly $8.5 million cuts, which include cutting 10 and a half jobs, the agency’s budget request shows. “Through our budget strategy, (the Idaho Department of Correction) is working internally to renegotiate or remove contracts within the agency to reach the required $10.6M reduction in (fiscal year 2026) and ongoing,” agency spokesperson Sanda Kuzeta-Cerimagic told the Sun in a statement. “A primary driver of these cost reductions has come from our Community Supervision budget unit as that area contains the most ability to absorb the holdback versus costs associated with housing residents.” Health and Welfare and the Department of Correction are still requesting more money this fiscal year. The supplemental budget requests ask for $60 million more for Idaho Medicaid, and nearly $13.7 million for prison populations. Idaho still on track for budget deficit this year, projections show It’ll take months before any of the new proposed cuts for fiscal year 2027 are officially approved, or implemented. The governor, and the Legislature, will sift through those requests while they set the state’s budget during the 2026 legislative session, which starts in January. Little’s order for 3% midyear budget cuts across state government — which he later made permanent — was meant to avoid a projected $80 million budget shortfall, which would violate the Idaho Constitution’s requirement for the state to maintain a balanced budget. But the most recent state projections show Idaho is still projected to have a $56.6 million budget deficit at the end of fiscal year 2026, even with the 3% budget cuts factored in, the Idaho Capital Sun reported. Asked if more cuts are needed this year, Wolff, the governor’s budget chief, said state officials “try not to overreact to early revenue numbers.” “We have seen a few trends that are not necessarily consistent with what we’ve seen in the past,” she said. “So the governor’s budget is due the first part of January, and we want to make sure we have October, November and December numbers in before we overreact to some of the revenue and how it’s being tracked and coming in. But obviously, if they are coming in lower, and if we need to reduce further, we’ll be looking at other pots of money to be able to do that.” Idaho Capital Sun is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity.
