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This paper presents an overview of the State of Idaho’s FY 2022 budget recommendations and appropriations in the context of demographic changes, economic conditions, and politics. The Executive Budget for FY 2022 notes Governor Little’s historical support of education, job growth, economic opportunity, and fostering an environment for Idaho to avoid citizen migration to other states. However, this policy, along with the COVID-19 exodus, has resulted in a large influx of people from other states with the commensurate housing and infrastructure demands. As most Idaho budgets tend to move incrementally in support of education and infrastructure in the context of very healthy revenues, the state is likely to weather, though with some ambivalence, economic fluctuations. However, partisan tensions threaten education and safety net programming.

Like Idaho’s population and economy in general, state budget appropriations have increased moderately each year. The 2018 legislative session focused upon tax changes and continued infrastructure investment. Ongoing challenges in the state include disparity between the regions in terms of economic and population growth and the disconnect between citizen preferences and legislative action in Medicaid gap funding.

In Idaho, the FY18 budget drew upon the usual agency requests, executive recommendation,and legislative appropriation activities. However, less business-as-usual was the judicial branchinvolvement due to the post-sine die transmittal, and subsequent veto, of a bill to eliminate thesales tax on food. Citing the implications for General Fund revenue and fiscal challenges fromextreme weather conditions in early 2017, Governor Otter vetoed the sales tax repeal sparking alegal challenge from legislators. The Idaho Supreme Court upheld the executive veto in a 4‒1decision.The robust individual income and sales tax collections reported at close of FY17 exceededthe projections used to develop the FY18 budget, prompting automatic transfers to Idaho’s “savingsaccounts.” This outcome has great significance for the FY18 budget and will almost certainlyflavor anticipated FY19 budget discussions in the 2018 legislative session due to residual frustrationover tax reforms passed, not passed, and vetoed from the 2017 session.In terms of FY18, the budget balanced without infusion from Idaho’s savings funds, basicservices continued, and modest progress continued in education, economic development, andphysical and technology infrastructure. However, the FY18 budget did not reflect important issuesincluding needed regulatory action, tax, and rate reforms intended to catalyze economic development,tax repeals advocated by certain constituencies, medical care access and affordability,and sustainable state capacity. As most of these have long-term budget implications, state government(elected and appointed) will not be able to avoid action indefinitely.