Idaho is known as a conservative place. Over the last several years, however, the conservative mindset has not been seen much in the state’s financial affairs.  Conservatives used to match revenue to the needs of the Idaho citizens. Certainly not overspend or have deficit spending.  Heck, we even developed reserve funds (“rainy day” funds) of over a billion dollars.  But 4-5 years ago, that conservative mindset was replaced by an irrational need to cut taxes on corporations and affluent residents.  Cuts to corporate taxes and cuts to income taxes for higher earners, and special interest tax credits have diminished our revenues.

The current statewide budget holdbacks will impact the services people need, and especially to support families and kids.   The latest give-away is Tax Conformity, following tax rules developed not by Idaho but by the federal government in its budget busting  “One Big Beautiful Bill”.

Tax conformity is often described as routine or harmless. House Bill 559 is neither.

HB 559 would automatically adopt major federal tax changes into Idaho law—including exemptions for tips and overtime, deductions for auto loan interest, and a new $6,000 senior deduction—without requiring Idaho lawmakers to make a deliberate, Idaho-specific decision about whether these changes are affordable or aligned with our priorities.

At the same time, lawmakers have already enacted—and continue to pursue—additional cuts to Idaho’s income tax rates, further shrinking the state’s revenue base. Taken together, these choices represent a significant and ongoing disinvestment in the public systems Idaho families and children rely on every day.

According to the bill’s fiscal note, HB 559 alone would reduce state revenues by $155 million in fiscal year 2026 and $175 million in fiscal year 2027. Those losses come on top of $4B income tax cuts over the last 5 years that have already constrained Idaho’s ability to respond to growing needs.

And this is the most important point that often gets ignored in tax debates: Every single dollar of reduced revenue has a consequence.  In Idaho, those consequences fall heavily on children and families.

More than one in three Idaho children rely on Medicaid or CHIP for health coverage. Medicaid pays for nearly half of all births in the state and is the primary source of coverage for children with disabilities, complex medical needs, and developmental delays. When revenue is reduced, Medicaid is one of the first places lawmakers look for cuts.

Idaho’s child welfare system is already stretched dangerously thin. Caseworkers carry high caseloads, foster families are in short supply, and prevention services are underfunded. Behavioral health services for children are similarly strained—many rural counties have no child psychiatrists at all, and families routinely wait months for care.

Public education faces ongoing challenges as well. Idaho ranks near the bottom nationally in per-pupil spending, and schools increasingly serve as the front line for addressing students’ mental health, food insecurity, and developmental needs. When state revenue declines, schools are asked—yet again—to do more with less.

These are not abstract tradeoffs. They show up as longer waitlists for early intervention, fewer school counselors, reduced access to rural health care, and families left without support.

Supporters of HB 559 frame it as tax relief, but the benefits are uneven, poorly targeted, and disconnected from Idaho’s fiscal reality. Tax conformity blindly inserts federal tax policy, while income tax cuts disproportionately benefit higher earners. All this adds to the revenue deficit the state is facing.

Meanwhile, families with children absorb the impact when services are reduced or eliminated, and by shifting the burden to property taxes.

Idaho is not required to follow the federal government off a fiscal cliff. Tax conformity is a choice, not an obligation. Tax cuts are choices too.

Responsible governance means evaluating tax changes on their own merits. It means being honest about who benefits, who pays, and which services will be reduced as a result. And it means acknowledging a hard truth: when revenue disappears, children and families are almost always the first to feel it.

Idaho fiscal policy fails to support the needs of our children. Idaho lawmakers should reject HB 559 and recommit to a financial policy that protects essential services, supports families, and invests in the health and well-being of Idaho’s children.

Julie Yamamoto, Former State Legislator, Educator, Caldwell
John Rusche, MD, Former Idaho Legislator, retired Pediatrician, Lewiston
Chris Loucks, PhD, Professor Emerita, Department of Economics, Boise State University