Despite claims from some that prioritizing tax relief would imperil Idaho’s budget, the Gem State has just closed the books on Fiscal Year 2026, ending in the black while rolling over approximately $250 million in cash balances to the General Fund for Fiscal Year 2027. Idaho also currently has nearly $1.3 billion in total reserves (22%) to weather any changes in the economic outlook.
Touting this news, Idaho Governor Brad Little noted, “A strong economy is built on fiscal discipline . . . The lesson learned from this year is that discipline matters. The same principles that allowed Idaho to deliver historic tax relief and strong reserve balances also allowed us to navigate a more challenging budget year without sacrificing our highest priorities.”
Idaho’s prudent budget policies continue to secure the Gem State a top credit rating. As explained by Idaho State Controller Brandon Woolf, “Independent recognition from Moody’s reinforces what Idaho taxpayers have come to expect – responsible financial management and long-term planning. Our statewide financial systems, strong internal controls, and collaborative approach to fiscal oversight help ensure Idaho remains one of the best-managed states in the nation while maintaining the flexibility to respond to changing economic conditions.”
Things couldn’t be any different in neighboring Washington state. While Idaho took steps to right-size its budget while still providing tax relief, the Evergreen State has instead imposed tax increase after tax increase while recklessly overspending.
Two former Democratic governors in Washington have seen enough and are now sounding the alarm about the state’s lack of spending discipline.
Former Governor Gary Locke recently said, “I think spending is out of control in Olympia. They need much more discipline. They need to set priorities. And when they say that they’re going to create a program and they ask the voters to approve of that particular program, they need to make sure that they don’t take that money a few years later and spend it on something else because then the voters lose faith.”
This follows on the warning earlier this year from former Governor Christine Gregoire who said, “I would suggest to you we don’t really have an income problem, we have a spending problem.”
Washington business leaders are also pleading for course correction. Tod Leiweke, CEO of the Seattle Kraken NHL team, said about the Evergreen State’s fiscal policies, “In my time, I have not felt as much fear in the business community as I feel today.”
Idaho balanced its budget while providing tax relief and maintaining a strong credit rating. Washington instead continued to impose tax increases to feed out-of-control spending while also being warned its credit rating is at risk. It’s clear which of these radically different fiscal approaches taxpayers and business leaders want policymakers to pursue.
Idaho is being rewarded for its prudent budget policies. The Evergreen state is facing a business climate in distress from self-inflicted wounds. Unless Washington changes course, expect more of its citizens and businesses to head east to enjoy the benefits of the Gem State’s fiscal discipline.
