Idaho state budget well positioned to handle ongoing impacts of COVID-19

Idaho just ended its fiscal year with a surplus nearly three times what was expected before COVID-19.

How, in the middle of a global pandemic, did we manage to do that?

Through conservative principles of governing.

In late March, shortly after the first coronavirus case was confirmed in Idaho, I asked state government agencies to do what businesses and families across Idaho were having to do – tighten their belts. I called for agencies to cut spending and freeze hiring and any planned salary increases. We were one of the first states to announce a formal holdback.

Conservative revenue forecasting also contributed to our relatively positive budget situation. With the support of the Legislature, we used a more conservative revenue forecast than in previous years in order to provide a greater cushion at fiscal year-end. We also moved the tax filing deadline to June 15, giving citizens more time to file their taxes but kept filings in the same fiscal year. Other liberal states had to look for ways to cover shortfalls.

We’ve also taken steps to catalyze Idaho’s economic rebound. Idaho was one of the last states with a confirmed COVID-19 case and one of the first states with a plan to safely and responsibly open our economy in stages. In fact, Idaho was ranked as the number one state for economic momentum during the pandemic because of our wage growth and employment figures.

While other states already withdrew approximately $1.7 billion from their rainy-day funds during COVID-19, we strengthened Idaho’s rainy-day funds with year-end transfers. We anticipate having close to $580 million in reserve. This will prepare us well for the coming years.

I’m not trying to be overly optimistic about our budget situation. We anticipate there will be a three- to four-year budget impact because of COVID-19. However, ending our fiscal year with a large surplus means Idaho is well positioned to deal with the ongoing economic reality of living during a global pandemic.

We will be able to carry over the surplus into the current fiscal year and minimize service disruption to Idahoans. While other states are facing twenty- to forty-percent cuts, I have asked Idaho state government to prepare for a five-percent holdback this fiscal year. Holdbacks are never easy, but a lot of states would love to be in our position right now.

Thankfully, Idaho’s public school system will be minimally impacted by COVID-19 in the new fiscal year because of our efforts to strategically leverage federal funds to offset planned reductions. Fiscal conservativism elsewhere in the budget combined with the relief funds we directed to K-12 mean teachers, students, and parents won’t feel as much of an impact in schools like they will in other states.

Between direct federal support for schools and our actions through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a total of $122.2 million has been committed to K-12 public education for the next school year.

I’ve said it before – it’s what you do in the good years that sets you up for failure or success. Under criticism from some, the Legislature and I chose to pad our rainy-day funds during times of economic prosperity, so we are better able to weather economic downturns like the one we are experiencing across the country now.

I want to thank my partners in the Legislature who have helped position our state for a strong economic rebound.

These are uncertain, challenging times but we are far better off here than elsewhere right now, thanks to our focus on fiscal conservatism in state government.

Gov. Brad Little

About Gov. Brad Little

Little began his first term as Idaho's governor in January 2019. The Republican also has served in the Idaho Senate and as Idaho's lieutenant governor.

Read more stories by Gov. Brad Little »

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