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Hello and welcome to Idaho Reports.

Special live coverage of the 2026 State of the State Address and Governor Brad Little's budget proposal.

I'm joined on set today by governor, not governor, Kevin Richert of Idaho Education News.

I just gave you a promotion there.

Dr.

Stephanie Witt from Boise State University School of Public Service and State Budget Director from the Division of Financial Management, Lori Wolff.

Doctor Witt, as we're waiting for the governor to take the lectern in the house, what are you going to be listening for in today's address >> I'M INTERESTED TO HEAR WHAT THE PLAN IS FOR DEALING WITH THE REVENUE SHORT FALL.

THIS IS THE BIG THING THAT IS IN THE WAY FOR EVERYTHING ELSE.

SO WHAT ARE WE GOING TO DO?

AND I THINK AS A LISTENER, AND THE INTERESTING THING IS WHAT WE ARE NOT TALKING ABOUT.

ARE WE TALKING ABOUT ALL THE THINGS WE MIGHT DO OR ONLY SOME?

AND TO SEE HOW TO CONTINUE TO PUSH HIS -- HOW THE GOVERNOR WILL PUSH HIS AGENDA FORWARD WITH A MUCH REDUCED REVENUE POT TO DRAW FROM.

>> AND KEVIN, AS WE ARE WAITING FOR THE GOVERNOR, LET'S REMIND FOLKS WHAT THE BUDGET LANDSCAPE IS.

>> WE HAVE A LANDSCAPE WHETHER IT'S A SHORT FALL WE ARE LOOKING AT FOR 2026.

THE BUDGET YEAR THAT ENDS ON JUNE 30th, THAT IS $40 MILLION.

THE BIGGEST IS WHEN WE HAVE THAT PROJECTED $550 MILLION GAP BETWEEN AGENCY REQUESTS AND EXPECTED REVENUE.

IT'S GOING TO BE REALLY INTERESTING TO SEE HOW THE GOVERNOR TRIES NAVIGATE THOSE BUDGET STRENGTHS.

AND HOW DO LAWMAKERS RESPOND TO HIS BUDGET PROPOSALS.

>> AND WE'VE HEARD VARYING LEVELS OF CONCERN FROM STAKEHOLDERS AND LAWMAKERS ABOUT THIS BUDGET SHORT FALL.

EVERYTHING FROM THIS IS A CRISIS, WE REALLY NEED TO RECONSIDER THE TAX CUTS WE HAVE PREVIOUSLY PUT IN PLACE, ESPECIALLY THOSE LAST YEAR, TO SOME SAYING THIS IS NOT A CRISIS AT ALL.

THIS IS A PERFECTLY SOLVABLE PROBLEM.

THAT IS WHAT WE HEARD FROM THE GOVERNOR DURING A LEGISLATIVE PREVIEW ON THURSDAY.

>> YEAH.

HE UNDERSCORED WHAT WE HAVE HEARD FROM A LOT OF IDAHO REPUBLICANS.

THE ECONOMY IS STRONG, THE UNDERLYING ECONOMIC INDICATORS ARE ALL ENCOURAGING.

WE HAVE A SHORTFALL IN TERMS OF CASH FLOW.

BUT THIS VERY UNUSUAL CASH FLOW SITUATION IN WHICH THE ECONOMY IS STRONG, BUT AT THE SAME TIME THERE WILL NOT BE ANY FEDERAL INFUSION OF MONEY THAT WE HAVE SEEN THE PAST COUPLE OF TIMES THAT IDAHO HAS FACED A SHORT FALL.

IDAHO IS ON ITS OWN ON THIS ONE.

>> DIRECTOR WOLFF, KNOWING THAT YOU DON'T WANT TO SCOOP THE GOVERNOR RIGHT BEFORE HIS BIG SPEECH, CAN YOU GIVE US INSIGHT INTO HOW YOUR STAFF AND THE GOVERNOR'S OFFICE WORKED TOGETHER TO PUT TOGETHER THIS BUDGET PROPOSAL?

>> I THINK THE BEST THING THAT WE DID WAS ACT EARLY.

WE SAW IN AUGUST SOME OF THESE -- WE DID SOME CORRECTIONS IN OUR REVENUE PROJECTIONS.

THE GOVERNOR DIDN'T WAIT.

HE ISSUED HIS EXECUTIVE ORDER IN THE MIDDLE OF AUGUST AND WE WENT TO WORK FIGURING OUT HOW WE ARE GOING TO RIGHT SIZE SOME OF THE SPENDING.

>> AND JUST TO REMIND VIEWERS, THIS WAS AN EXECUTIVE ORDER THAT DIRECTED STATE AGENCIES TO REDUCE THEIR SPENDING BY 3% EXCEPT FOR PUBLIC SCHOOLS; RIGHT?

>> THAT'S RIGHT.

IN FISCAL YEAR '26.

AND LATER WE CAME OUT WITH SOME DIRECTION TO HAVE AGENCY DIRECTORS IN THE DRIVER'S SEAT ON HOW TO ALSO BALANCE THE BUDGET FOR FISCAL YEAR '27.

SO I THINK WE HAVE CONFIDENCE IN THE PLAN THAT THE GOVERNOR IS GOING TO ROLL OUT.

YOU KNOW, IT'S NOT LIKE PREVIOUS YEARS WHEN WE HAD HUGE INFLUX IN GROWTH, BUT THE GOVERNOR HAS BEEN SOLID ABOUT THE ECONOMY DOES LOOK GOOD.

I THINK WE'RE JUST RESPONDING TO KIND OF SOME MORE NORMALIZATION OF WHAT WE ARE SEEING IN TERMS OF REVENUE COMING IN.

>> AND WE ARE STILL WAITING FOR THE GOVERNOR TO ENTER THE HOUSE CHAMBERS AND BEGIN HIS SPEECH.

BUT LET'S TALK A LITTLE BIT ABOUT THAT STABILIZATION OF REVENUE.

BECAUSE WE ARE COMING OUT OF A HUGE INFLUX OF FEDERAL DOLLARS DURING THE COVID YEARS.

WHERE WE SAW A LOT OF MONEY FROM THE FEDERAL GOVERNMENT TO HELP PROP UP SOME STATE REVENUES THAT MIGHT HAVE OTHERWISE STRUGGLED.

CAN YOU TALK ABOUT IDAHO'S APPROACH DURING THOSE YEARS COMPARED TO SOME OF THE OTHER STATES?

>> I THINK IDAHO DID A FANTASTIC JOB LIKE SOME OTHER STATES.

THEY STOOD UP ONGOING PROGRAMS, THEY OBLIGATED ONE-TIME MONEY FOR OBLIGATIONS.

WE PAID DOWN DEBT.

WE TOOK CARE OF DEFERRED MAINTENANCE.

WE INVESTED IN SOME MAJOR CAPITAL PROJECTS AND INVESTMENTS AROUD WATER AND SEWER AND TRANSPORTATION.

AND REALLY POSITIONED IDAHO FOR THE GROWTH THAT WE ARE SEEING NOW.

ALSO WHEN REVENUES WERE EXCEEDING, WE LOOKED AT TAX CUTS.

WE PUT MONEY BACK IN THE POCKET OF IDAHO FAMILIES.

>> KEVIN, WHEN IT COMES TO EDUCATION TODAY AND WE JUST GOT WORD THAT LAWMAKERS ARE GOING TO INVITE THE GOVERNOR INTO THE HOUSE CHAMBERS TO GIVE HIS SPEECH.

WHILE WE ARE WAITING, WHAT ARE YOU GOING TO BE LISTENING FOR WHEN IT COMES TO BOTH PUBLIC EDUCATION AND HIGHER EDUCATION?

>> I THINK THE BIG THING TO LISTEN FOR TODAY AND THE BIG THING TO WATCH FOR AS THE SESSION UNFOLDS, IS WHAT HAPPENS TO K-12.

AS YOU DISCUSSED ALREADY, K-12 HAS BEEN SPARED SO FAR IN THE BUDGET CUTS.

THERE ARE SOME LAWMAKERS AND INTEREST GROUPS THAT ARE SAYING BUDGET CUTS SHOULD HAVE GONE ACROSS THE BOARD AND K-12 SHOULD HAVE BEEN AFFECTED.

SO IT WILL BE INTERESTING TO SEE HOW K-12 FAIRS THROUGH THIS SESSION.

ALSO HIGHER EDUCATION.

HIGHER EDUCATION ALREADY DID TAKE A HIT.

THEY TOOK ABOUT A $13 MILLION HIT WHEN YOU LOOK AT THE 3% CUT.

WHAT HAPPENS TO HIGHER ED, WHAT THEIR BUDGET LOOKS LIKE AT A TIME WHEN YOU HAD ENROLLMENT INCREASES AND AT A TIME WHEN -- ANY TIME YOU CUT HIGHER ED SPENDING AT THE STATE LEVEL, IT CREATES PRESSURE ON TUITION AND FEES AND IT EVENTUALLY BECOMES SOMETHING THAT GETS PASSED ON TO STUDENTS AND PARENTS.

>> DIRECTOR WOLFF, ONE OF THE BIG PRESSURES ON THE BUDGET THE PAST FEW YEARS HAS BEEN THE MEDICAID SPENDING.

AND NOT JUST BECAUSE OF MEDICAID EXPANSION, BUT FROM POPULATION GROWTH AND FROM INCREASE COSTS FROM PEOPLE WHO RELY ON MEDICAID FOR NOT JUST THEIR DIRECT HEALTHCARE, BUT THINGS LIKE NON-EMERGENCY MEDICAL TRANSPORTATION AND PHYSICAL THERAPY AND IN-HOME HEALTHCARE.

THE GOVERNOR SAID ON THURSDAY THAT REPEALING MEDICAID EXPANSION IS NOT PART OF HIS PROPOSAL.

CAN YOU GIVE US ANY INSIGHT INTO WHETHER THERE ARE ANY OTHER MEDICAID CUTS, HOWEVER, THAT WILL EFFECT IDAHOANS THAT RECEIVE THESE SERVICES?

>> MEDICAID IS THE FASTEST GROWING SERVICE.

CUTTING MEDICAID EXPANSION IS NOT THE ANSWER THE GOVERNOR IS LOOKING AT, BUT WE ARE LOOKING AT WHERE ARE SOME PLACES THAT WE CAN REDUCE SOME SPENDING OR AT LEAST CONTROL SPENDING?

YOU WILL SEE SOME SUPPLEMENTALS THAT ARE PRETTY HIGH THIS YEAR.

UTILIZATION AND COST OF HEALTHCARE.

IT'S NOT JUST IMPACTING MEDICAID, IT IMPACTED OUR EMPLOYEE HEALTH BENEFITS AND IT'S IMPACTING REALLY EVERYWHERE.

I MEAN HEALTHCARE IS EXPENSIVE.

>> LET'S TALK ABOUT THAT A LITTLE BIT.

I THINK THREE OUT OF FOUR OF US ON THIS PANEL RIGHT NOW ARE STATE EMPLOYEES.

ONE OF THE CHANGES THAT STATE EMPLOYEES SAW WAS THERE IS NO LONGER STATE COVERAGE OF GLP-1 UNLESS THERE IS A SPECIFIC REASON FROM THE DOCTOR.

DO WE YET KNOW IF THAT HAS ACTUALLY SAVED THE STATE MONEY?

>> SO THE GOVERNOR'S BUDGET FROM WHEN WE FIRST RELEASED THAT NUMBER IN THE SUMMER TO BUILD THE BUDGETS ON, TO THE GOVERNOR'S RECOMMENDATION, WE WERE ABLE TO REDUCE SPENDING IN A COUPLE OF WAYS, BUT GLP-1'S WAS ONE OF THEM.

LOOKING AT THAT AS NOT A WEIGHT LOSS SOLUTION, BUT MAKING SURE THAT WAS STILL AVAILABLE FOR DIABETES OR OTHER DIAGNOSIS.

LIKE EVERYTHING ELSE WE HAD TO LOOK AT BUDGETS AND MAKE IMPORTANT DECISION ABOUT WHAT THE STATE IS ABLE TO FUND.

>> AND THERE IS ALSO 4% REDUCTION IN MEDICAID REIMBURSEMENT FOR PRIVATE BUSINESSES THAT PROVIDE MEDICAID SERVICES.

AGAIN, LIKE THE NON-EMERGENCY MEDICAL TRANSPORTATION, DENTAL SERVICES, PHYSICAL THERAPY.

THAT STARTED SEPTEMBER 1st.

ANY IDEA IF THAT IS GOING TO BE ONGOING IN THIS YEAR'S BUDGET PROPOSAL?

>> THE GOVERNOR WILL ROLL OUT HIS BUDGET PROPOSAL, BUT THE 4% PROVIDER RATE CUTS, WE DID THAT AS A STOPGAP IN 2026, AND THEN ASKED AGENCIES TO MAKE THEIR REDUCTIONS ONGOING.

SO I THINK THE EXPECTATION THAT THE DEPARTMENT LAID OUT FOR PROVIDERS IS, EXPECT THIS TO BE A LONG-TERM THING.

>> AND WE JUST GOT WORD THAT THE GOVERNOR IS ABOUT TO ENTER THE HOUSE CHAMBER.

THEY JUST SAT THE CONSTITUTIONAL OFFICERS AND THE IDAHO SUPREME COURT JUSTICES.

>> I WILL INTRODUCE THE GOVERNOR FOR US, PLEASE.

>> THE GOVERNOR OF THE GREAT STATE OF IDAHO.

THE HONORABLE BRAD LITTLE.

[ APPLAUSE ] >> WELCOME TO THE HOUSE FLOOR, GOVERNOR.

WE LOOK FORWARD TO YOUR WORDS OF ENCOURAGEMENT AND IT'S GOING TO BE A GOOD DAY.

WE LOOK FORWARD TO WHAT YOU HAVE TO SAY.

>> ALL RIGHT.

PLEASE BE SEATED.

MR.

SPEAKER, MR.

PRO TEM, MR.

PRESIDENT, HONORED LEGISLATORS, MY FELLOW CONSTITUTIONAL OFFICERS, MR.

CHIEF JUSTICE, AND MEMBERS OF THE JUDICIARY.

MY WIFE TERESA AND YOUR FIRST LADY, OUR FAMILY, FRIENDS, AND MY FELLOW IDAHOANS.

AS TERRY A IS A AND I BEGIN THE FINAL YEAR OF MY SECOND TERM AS IDAHO'S 33rd LIEUTENANT GOVERNOR, WE ARE DEEPLY HUMBLED TO SERVE THE PEOPLE OF THE GREAT STATE.

THESE PAST SEVEN YEARS HAVE ONLY RE-ENFORCED WHAT WE HAVE LONG KNOWN, IDAHO AND HER PEOPLE ARE GROUNDED IN ENDURING VALUES.

WE ARE INDEPENDENT AND INNOVATIVE.

WE ACT WITH INTEGRITY.

WE APPROACH OUR LIVES AND OUR WORK WITH UNWAVERING GRIT.

IDAHO IS EVOLVING.

HOWEVER, THROUGH THE CHANGE, WE MUST COMMIT OURSELVES TO PRESERVING OUR STATE AS THE PLACE WHERE OPPORTUNITY THRIVES.

WE MUST DEDICATE OURSELVES TO CARRYING FORWARD THE VALUES THAT DEFINE US, MAKING SURE THEY ENDURE FOR GENERATIONS TO COME.

WE HAVE SOME VERY SPECIAL GUESTS WITH US TODAY.

IDAHO'S PAST THREE GOVERNOR'S AND FIRST LADIES.

IDAHO'S 32ND GOVERNOR, GOVERNOR BUTCH OTTER AND FIRST LADY LORI.

IDAHO'S 31st GOVERNOR, U.S.

SENATOR JIM RISCH AND FIRST LADY VICKI.

AND IDAHO'S 30th GOVERNOR, GOVERNOR DIRK KEMPTHORNE AND FIRST LADY PATRICIA.

WILL YOU PLEASE STAND.

[ APPLAUSE ] >> IT'S GREAT TO HAVE YOU HERE.

I HOPE I GET HALF THAT APPLAUSE.

[ LAUGHTER ] THESE GREAT GOVERNORS ESTABLISHED A FOUNDATION OF SUCCESS THAT IDAHO ENJOYS TODAY.

THEY BROUGHT A PASSIONATE, PRINCIPLED, AND PURPOSEFUL APPROACH TO LEADERSHIP.

AND THEIR DECISIONS PRIORITIZED LONG-TERM WELL BEING OF OUR STATE WHICH REMAINS CENTRAL TO IDAHO'S PROSPERITY.

THANK YOU FOR BEING HERE.

THIS YEAR, AMERICA TURNS 250 YEARS OLD.

A MILESTONE THAT INVITES CELEBRATION, REFLECTION, AND HOPE.

WE ALSO MARK THE 25th ANNIVERSARY OF 9/11.

WE REMEMBER THE PATRIOTISM, UNITY, AND SENSE OF COMMUNITY THAT EMERGED FROM THAT TRAGEDY.

IN THE YEAR AHEAD, WE BUILD ON THAT SPIRIT BY CREATING NEW OPPORTUNITIES FOR COMMUNITIES ACROSS IDAHO TO SERVE GOD AND ONE ANOTHER.

, TO SHOW LOVE FOR OUR NEIGHBORS.

FOR 2 .5 CENTURIES, THE UNITED STATES OF AMERICA HAS BEEN DEFINED BY THE IDEA THAT FREEDOM AND OPPORTUNITY BELONG TO ALL AS WE LOOK TO THE FUTURE OF OUR GREAT COUNTRY, THE SAME IDEA WILL UNITE US AS IT ALWAYS HAS.

ON THE 250th ANNIVERSARY OF OUR COUNTRY'S BIRTH LET'S RECOGNIZE AND THANK THE GENERATIONS THAT BUILT THIS NATION AND THOSE THAT DEFIND IT TODAY ARE ACTIVE MILITARY MEMBERS AND VETERANS.

IF YOU HAVE SERVED OUR COUNTRY IN THE MILITARY, PLEASE STAND SO WE CAN THANK YOU.

[ APPLAUSE ] >> AS WE KICK OFF THE 2026, WE REFLECT ON ALL THAT HAS OCCURRED OVER THE PAST YEAR.

AND IT WAS AN ACTION-PACKED YEAR.

THE AMERICAN PEOPLE PUT DONALD TRUMP BACK IN THE WHITE HOUSE TO SEND SHOCK WAVES THROUGH OUR SYSTEM THAT NEEDED SHAKING UP.

AND BOY, DID HE DELIVER.

WASHINGTON NEEDED A JOLT, AND PRESIDENT TRUMP DELIVERED FULL VOLTAGE.

TRUMP HAS RESHAPED THE FEDERAL GOVERNMENT WITH A RENEWED FOCUS ON STRENGTH AND ACCOUNTABILITY.

AMERICA'S BORDER IS FINALLY SECURE AND PRESIDENT TRUMP HAS PUT FORWARD A PRO AMERICAN AGENDA.

LAST YEAR IN THE OVAL OFFICE I SPOKE WITH PRESIDENT TRUMP ABOUT HOW IDAHO EXEMPLIFIES HIS VISION OF AMERICA.

WE'RE TOUGH ON CRIME, WE PROTECT THE UNBORN, WE ELIMINATED CRT AND DEI, AND WE LED THE NATION IN PREVENTING MEN FROM COMPETING IN WOMEN'S SPORTS.

[ APPLAUSE ] WE ALSO TALKED ABOUT HOW IDAHO ADVANCES HIS TALENT STRATEGY FOR AMERICA THROUGH IDAHO LAUNCH.

TOGETHER WE ARE PUTTING AMERICAN WORKERS FIRST.

INNOVATIVE WORK FORCE TRAINING PROGRAMS POWER A MODERN ECONOMY, RE-ENFORCE AMERICA'S COMPETITIVE DOMINANCE OVER CHINA, AND HELP IDAHO WORKERS EARN MORE AND AFFORD MORE.

LAUNCH REMAINS ONE OF MY TOP PRIORITIES FOR ONE SIMPLE REASON, IT'S WORKING.

MORE IDAHO KIDS ARE CHOOSING TO STAY IN IDAHO AFTER HIGH SCHOOL THAN EVER BEFORE, AND POST-SECONDARY ENROLLMENT IS DECLINING ACROSS THE NATION, BUT NOT IN IDAHO.

IDAHO IS BUCKING THE TREND.

NOW IN YEAR TWO, LAUNCH IS PREPARING YOUNG IDAHOANS TO STEP DIRECTLY INTO THE MOST IN-DEMAND JOBS IN OUR STATE INCLUDING SKILLED MECHANICS, HEALTHCARE WORKERS, TEACHERS, AND OTHERS.

I'M GRATEFUL FOR THE TRUMP TEAM'S SUPPORT OF LAUNCH.

I WAS HONORED TO HOST LABOR SECRETARY LORI CHAVEZ LAST YEAR TO CELEBRATE IT.

THE IDAHO LEGISLATURE AND I WILL CONTINUE TO PARTNER TOGETHER TO HELP PRESIDENT TRUMP DELIVER ON HIS PROMISE TO FIGHT FOR THE IDAHO WORKER.

FOR IDAHO, THE CHANGE FROM THE LAST ADMINISTRATION TO HAVING A REPUBLICAN IN THE WHITE HOUSE IS NOW NIGHT AND DAY.

UNDER BIDEN, IDAHO WAS KEPT IN THE DARK, BUT NOW WE HAVE A REAL PARTNER AT THE FEDERAL LEVEL.

NOWHERE IS THAT MORE OBVIOUS THAN IN SAFETY.

ASK ANY LAW ENFORCEMENT OFFICER ON THE GROUND AND THEY WILL TELL YOU, UNDER THE LAST ADMINISTRATION, IMMIGRATION ENFORCEMENT WASN'T JUST SLOWED DOWN, IT WAS PUT ON ICE.

[ LAUGHTER ] I KNEW YOU'D GET IT.

THAT CHANGED ONE YEAR AGO.

THE AMERICAN PEOPLE DELIVERED A MANDATE, ENFORCE THE LAW AND KEEP OUR PEOPLE SAFE.

IDAHO IS READY TO STEP UP.

THROUGH OPERATION NO RETURN, THE IDAHO STATE POLICE ARE REMOVING DANGEROUS ILLEGAL ALIEN CRIMINALS FROM OUR NEIGHBORHOODS.

WE'RE TALKING ABOUT CHILD RAPISTS, STALKERS, VIOLENT OFFENDERS, KIDNAPPERS, AND DRUG TRAFFICKERS.

THAT'S WHAT REAL PUBLIC SAFETY LOKS LIKE.

COLONEL BILL GARDINER IS HERE WITH SOME OF OUR TROOPERS WHO JUMPED ADD THE CHANCE TO HELP.

COLONEL AND TROOPERS, IDAHO IS AMONG THE SAFEST STATES IN THE NATION BECAUSE OF YOU.

PLEASE STAND SO WE CAN THANK YOU.

[ APPLAUSE ] >> OVER THE PAST YEAR, OUR PARTNERSHIP WITH THE TRUMP ADMINISTRATION IS DELIVERING REAL RESULTS IN OTHER AREAS AS WELL.

LAST YEAR I WAS PROUD TO HOST HHS SECRETARY RFK JR.. WE WERE SHOWCASING IDAHO'S LEADERSHIP IN MAKE AMERICA HEALTHY AGAIN MOVEMENT.

FROM RESTRICTING CELL PHONE USE IN SCHOOLS, TO ELIMINATING CANDY AND SODA IN THE FOOD STAMP PROGRAM.

WE ARE ALSO PARTNERING WITH THE TRUMP TEAM TO DELIVER RESULT IN ENERGY DOMINANCE.

THE IDAHO NATIONAL LABORATORY HAS BEEN AT THE FOREFRONT FOR DECADES, AND TODAY UNDER PRESIDENT TRUMP, AMERICA IS EXPERIENCING A NUCLEAR ENERGY RESURGENCE.

WE RECENTLY HOSTED ENERGY SECRETARY CHRIS WRIGHT TO CELEBRATE THE INL'S ROLE IN STRENGTHENING AMERICA'S COMPETITIVENESS.

BOOSTING ENERGY SECURITY AND PROTECTING CRITICAL SYSTEMS FROM CYBER THREATS.

AND THE INL PLAYS A CRITICAL ROLE IN SUPPORTING THE U.S.

NAVY'S MISSION TO SAFEGUARD LOCAL COMMERCE, RE-ENFORCE OUR NATIONAL DEFENSE, AND MAINTAIN AMERICA'S DOMINANCE OVER CHINA.

WE'RE ALSO DELIVERING RESULTS FOR RURAL COMMUNITIES THROUGH EXPANDED FEDERAL PARTNERSHIPS LIKE SHARED STEWARDSHIP AND GOOD NEIGHBOR AUTHORITY.

THESE FLAGSHIP AGREEMENTS BETTER PROTECT IDAHO COMMUNITIES FROM WILD FIRE, REVITALIZE RURAL IDAHO, IMPROVE FOREST HEALTH THROUGH INCREASED LOGGING AND ACTIVE MANAGEMENT.

WE'RE DELIVERING A BETTER QUALITY OF LIFE FOR OUR PEOPLE THROUGH JOINT EFFORTS IN EXPAND ACCESS IN OUTDOOR RECREATION BECAUSE IDAHOANS CHERISH AND PROTECT OUR PUBLIC LANDS.

[ APPLAUSE ] >> AND WE ARE CREATING JOBS THROUGH FASTER AND MORE EFFICIENT PERMITTING FOR A VARIETY OF PROJECTS FROM MINING TO ENERGY PRODUCTION.

WE'RE ALSO PARTNERING WITH PRESIDENT TRUMP TO DELIVER RESULTS FOR IDAHOANS BY CHAMPIONING COMMON-SENSE VALUES.

LIKE EDCATION FREEDOM AND STANDING UP FOR WOMEN'S SPORTS.

IN FACT, TOMORROW IDAHO GOES BEFORE THE U.S.

SUPREME COURT TO DEFEND OUR FIRST-IN-THE-NATION LAW TO PROTECT WOMEN'S SPORTS.

IDAHO WILL CONTINUE TO LEAD AND THE REST OF THE COUNTRY WILL CONTINUE TO FOLLOW BECAUSE COMMON SENSE STILL MATTERS.

[ APPLAUSE ] OF COURSE NO LOOK BACK AT THE PAST YEAR WOULD BE COMPLETE WITHOUT ACKNOWLEDGING A NEW ADDITION TO THE AMERICAN VOCABULARY.

DOGE.

THE TERM MAY BE NEW, BUT THE PRINCIPLE BEHIND IT IS SOMETHING IDAHO HAS LONG EMBRACED, THAT ELECTED LEADERS SHOULD ALWAYS SEEK TO REDUCE THE GOVERNMENT'S REGULATORY FOOTPRINT IN THE LIVES OF CITIZENS AND MAXIMIZE GOVERNMENT EFFICIENCY.

DURING MY TIME AS GOVERNOR, TOGETHER WE MADE IDAHO THE LEAST REGULATED STATE IN THE NATION.

WE CUT OR STREAMLINED 95% OF RULES AND REGULATIONS.

FOR ANYONE WHO'S BEEN BALD A LITTLE LONGER THAN THEY PLANNED -- [ LAUGHTER ] THAT'S NOT JUST A HAIR CUT, THAT'S A BUZZ CUT.

LAST YEAR, THIS BODY TOOK THE NEXT STEP BY PASSING THE CODE CLEANUP ACT TURNING OUR ATTENTION AND OUR SCISSORS TO STATE STATUES.

THE AGENCIES IN MY ADMINISTRATION GOT TO WORK, DEDICATING COUNTLESS HOURS TO SCRUB THE IDAHO CODE AND DELIVER OUR RED TAPE ROLLBACK REPORT TO THE IDAHO LEGISLATURE.

THE REPORT FOLLOWS THROUGH ON A KEY COMPONENT OF THE IDAHO ACT.

OUR REPORT RECOMMENDS REPEALING 145,000 WORDS OF STATE LAW, THE EQUIVALENT OF THE LENGTH OF 20 FOOTBALL FIELDS IF YOU LINED UP THE WORDS END-TO-END.

THE REPORT PROVIDES A ROAD MAP TO REMOVE OUTDATED DUPLICATIVE AND UNNECESSARY LAWS.

MR.

PRO TEM, MR.

SPEAKER, HERE'S OUR RED TAPE ROLLBACK PLAN FOR THE LEGISLATURE'S CONSIDERATION.

[ APPLAUSE ] I VALUE A STRONG COLLABORATION BETWEEN OUR TWO BRANCHES AS WE STREAMLINE OPERATIONS AND PURSUE COST SAVING REFORMS ACROSS STATE AGENCIES.

THROUGH MY EXECUTIVE ORDER, THE IDAHO ACT, AND OUR WORK WITH THE LEGISLATURE, WE ARE DRIVING CHANGES THAT IMPROVE PERFORMANCE, THAT'S BECAUSE THAT'S WHAT IDAHOANS EXPECT.

I WANT TO THANK YOU, THE MEMBERS OF THE IDAHO LEGISLATURE, FOR SHARING MY ZEAL FOR CUTTING RED TAPE.

YOU CODIFIED A PRACTICE I ESTABLISHED THROUGH EXECUTIVE ORDER IN 2020, ZERO-BASED REGULATION.

FORCING A ROUTINE REVIEW OF RULE CHAPTERS ANNUALLY.

WHAT WAS THE OUTCOME?

SAVINGS OF MORE THAN $1 MILLION AND A STATE GOVERNMENT THAT IS MORE TRANSPARENT, EASIER TO NAVIGATE, AND LESS BURDENSOME FOR CITIZENS OF BUSINESSES.

SMALL BUSINESS OWNERS DON'T NEED A LAWYER TO READ THE LAW.

AND LET'S BE HONEST, FEWER LAWYERS IN THE MIX NEVER HURT ANYBODY, EXCEPT MAYBE LAWYERS.

[ LAUGHTER ] SORRY.

LOOKING AHEAD, WE WILL REMAIN LASER FOCUSED ON CUTTING RED TAPE, DRIVING EVEN BOLDER REFORMS THAT FUEL ECONOMIC GROWTH AND SMARTER GOVERNMENT.

WE'LL DO IT WITH THE SAME SHARP, DISPLAINED APPROACH THAT HAS BEEN PROVEN TO WORK IN THE PAST.

THAT SPIRIT OF LIMITED EFFICIENT GOVERNMENT IS WOVEN INTO OUR' THIS HERE IN IDAHO.

IT IS ONE OF THE ENDURING VALUES THAT HELP US NAVIGATE THE BUDGET PRESSURES BEFORE US.

A BALANCED BUDGET ISN'T JUST REQUIRED CONSTITUTION, IT'S THE RIGHT THING TO DO.

TODAY I'M DELIVERING MY RECOMMENDATIONS FOR FISCAL YEARS 26 AND 27 -- SIX, SEVEN.

[ LAUGHTER ] [ KIDS SCREAMING SIX, SEVEN ] [ LAUGHTER ] >> THAT WENT OVER A LOT BETTER THAN I THOUGH IT WOULD.

[ LAUGHTER ] IT IS CALLED THE ENDURING IDAHO PLAN.

THE PLAN IS NAMED WITH PURPOSE.

ENDURING CAPTURES OF VISION OF IDAHO THAT IS RESILIENT, STRONG, AND BUILT FOR THE LONG TERM.

THANKS TO YEARS OF SMART GOVERNING, BUTCH, JIM, AND DIRK, IT WILL STAND THE TEST-OF-TIME.. HAS SHIFTED US FROM YEARS OF RECORD BUDGET SURPLUS DRIVEN BY RAPID POPULATION GROWTH, BUSINESS EXPANSION, AND ONE-TIME FEDERAL FUNDS TO A PERIOD AHEAD THAT DEMANDS RESTRAIN.

THANKFULLY THE WAY WE HAVE GOVERNED IN RECENT YEARS HAS POSITIONED IDAHO TO WHETHER THE REVENUE CHALLENGES AHEAD.

TOGETHER WE USE ONE-TIME FEDERAL FUNDS RESPONSIBLY ON ONE-TIME NEEDS.

NOT ONGOING PROGRAMS THAT WE EXPAND LONG-TERM OBLIGATIONS.

WE INVESTED IN CRITICAL INFRASTRUCTURE; ROADS, WATER, SEWER, BROAD BAND, STATE PARKS, AND OTHERS WHILE ELIMINATING YEARS OF DEFERRED MAINTENANCE IN STATE BUILDINGS.

WE PAID DOWN DEBT, AND IDAHO NOW BOASTS THE LOWEST PER CAPITA DEBT IN THE NATION.

[ APPLAUSE ] WE STRENGTHENED OUR RESERVES TO RECORD LEVELS, EARNING A COVETED AAA CREDIT RATING ONLY A HANDFUL OF STATES ACHIEVE.

TAKEN TOGETHER, THESE ACTIONS POSITION US TO ACHIEVE A BALANCED BUDGET IN THE COMING YEARS AND MAINTAIN CONFIDENCE IN IDAHO'S ECONOMIC FUTURE.

OUR ENDURING IDAHO PLAN MAKES WAY FOR IDAHO TO CONFORM TO THE TRUMP TAX CUTS, ACHIEVED THROUGH THE ONE BIG BEAUTIFUL BILL.

ONLY PRESIDENT TRUMP CAN NAME A BILL THAT CONFIDENTLY AND THEN MAKE IT DELIVER.

IDAHO ALREAD RANKS THIRD IN THE NATION FOR TAX FRIENDLINESS, BUT THE COST OF LIVING REMAINS HIGH.

AT A TIME WHEN EVERYTHING COSTS MORE, THE TRUMP TAX CUTS WILL PROVIDE REAL RELIEF.

THEY WILL PUT MORE MONEY BACK IN THE POCKETS OF IDAHO SENIORS AND WORKING FAMILIES SO THEY CAN AFFORD THE BASICS AND BREATHE A LITTLE EASIER.

THE TRUMP TAX CUTS WILL HELP IDAHO COMPETE FOR JOBS AND INVESTMENT.

AND PRESERVE THE CORE PRINCIPLES THAT I HAVE LONG ADVOCATED FOR IN IDAHO'S TAX SYSTEM.

SIMPLE, FAIR, PREDICTABLE, AND COMPETITIVE.

AS WE STRIVE TO MAKE LIFE MORE AFFORDABLE FOR IDAHOANS, MY PLAN ENSURES THAT RESOURCES IN PLACE TO DELIVER THOSE TAX CUTS FOR IDAHOANS.

FAMILIES AND BUSINESSES ACROSS IDAHO ARE GRAPPLING WITH RISING COSTS, PARTICULARLY IN HEALTHCARE, AND STATES EVERYWHERE ARE FEELING THE SAME STRAIN.

IN IDAHO, A FAST GROWING POPULATION ADDS TO THAT PRESSURE.

HOWEVER, IDAHO'S APPROACH TO BALANCING THE BUDGET STANDS IN STARK CONTRAST TO OUR NEIGHBORS TO THE LEFT, THE STATE OF WASHINGTON.

WASHINGTON JUST BROKE THE RECORD FOR THE BIGGEST TAX INCREASE IN THEIR HISTORY AND IT IS NO SURPRISE THAT WASHINGTON BUSINESS OWNERS WHO LOVE FAITH, FAMILY, FREEDOM AND KEEPING MORE OF WHAT THEY EARN ARE DITCHING THE EVERGREEN STATE AND COMING TO IDAHO.

UNLIKE WASHINGTON, IDAHO WON'T RAISE TAXES TO BALANCE THE STATE BUDGET.

IN IDAHO, WE WILL RIGHT-SIZE SPENDING TO MATCH THE PEOPLE'S MEANS.

LAST YEAR, OUR REVENUE FORECAST DECREASED BY 14% IN A FEW MONTHS.

THAT CHANGE WAS DRIVEN BY SEVERAL FACTORS.

A DIFFERENT APPROACH IN THE LEGISLATURE TO REVENUE FORECASTING.

HISTORIC TAX CUTS, SOFTER SALES TAX COLLECTIONS AS CONSUMER SPENDING ADJUSTED, AND ONGOING UNCERTAINTY AROUND INTEREST RATES AND THE NATIONAL ECONOMY.

RESPONSIBLE LEADERSHIP MEANS ACTING EARLY, NOT WAITING FOR CHALLENGES TO GROW.

THAT'S WHY WE TOOK DELIBERATE STEPS TO RIGHT SIZE SPENDING AND IDENTIFY EFFICIENCIES ACROSS ALL AGENCIES.

BUT WE WERE CLEAR ON ONE THING, K-12 SCHOOLS ARE NOT SUBJECT TO CUTS.

I SINCERELY THANK OUR STATE AGENCY DIRECTORS AND THEIR TEAMS FOR THEIR DEDICATION TO HELPING BALANCE THE STATE BUDGET.

THEY ARE TRULY TOP-NOTCH PROFESSIONALS AND PROUD IDAHOANS COMMITTED TO DOING WHAT IS BEST FOR OUR STATE.

PLEASE JOIN ME IN A ROUND OF APPLAUSE TO SHOW OUR DEEP APPRECIATION FOR OUR STATE AGENCY DIRECTORS AND STATE EMPLOYEES.

[ APPLAUSE ] >> LOOKING AHEAD, OUR ENDURING IDAHO PLAN BALANCES THE BUDGET, WITHOUT CUTTING INTO PUBLIC SCHOOLS.

WE'RE GOING TO DO IT WHILE PRESERVING THE THINGS THAT MATTER THE MOST TO OUR LONG-TERM WELL BEING AS A STATE.

HERE'S HOW.

OUR PLAN USES A RESPONSIBLE MIX ONE TIME AND ONGOING SPENDING REDUCTIONS TO KEEP THE BUDGET STRUCTURALLY SOUND.

ACROSS STATE GOVERNMENT, EXECUTIVE AGENCIES WILL TIGHTEN THEIR BELTS.

WE'RE RENEGOTIATING CONTRACTS TO SAVE MONEY.

WE'RE REPRIORITIZING INITIATIVES.

WE ARE FINDING OPERATIONAL EFFICIENCIES, AND WE WILL MAKE DISCIPLINED USE OF CASH BALANCES AND INTEREST EARNINGS.

ALL OF THIS SERVES TO LIMIT THE IMPACT ON IDAHOANS AS WE RIGHT SIZE GOVERNMENT.

JUST AS IMPORTANTLY, WE WILL PROTECT IDAHO'S FINANCIAL FOUNDATION.

WE WILL KEEP MONEY IN THE BANK SO WE CAN MAINTAIN OUR TRIPLE-A CREDIT RATING.

WE WON'T DEFICIT SPEND, AND WE WON'T ADD NEW DEBT, LIKE CONGRESS DOES.

OUR PLAN ALSO RIGHT SIZES FUNDING FOR ONLINE SCHOOLS, ENHANCING ACCOUNTABILITY, AND ENSURING LONG-TERM SUSTAINABILITY.

FOLKS, SOME OF THESE BUDGET DECISIONS ARE TOUGH, BUT WE WILL EMERGE STRONGER IN THE LONG RUN BECAUSE OF IT.

THIS IS WHAT FINANCIAL RESPONSIBILITY LOOKS LIKE.

PLANNING AHEAD AND LIVING WITHIN OUR MEANS.

OUR ENDURING IDAHO PLAN WAS CAREFULLY DESIGNED WITH STRATEGY AND FORESIGHT.

THAT STARTS WITH OUR PUBLIC SCHOOLS.

TOGETHER, WE'VE INCREASED STATE SUPPORT FOR PUBLIC SCHOOLS BY 70% SINCE I FIRST TOOK OFFICE.

WE SIGNIFICANTLY RAISED TEACHER PAY, INVESTED SEVEN TIMES MORE IN LITERACY PROGRAMS, DRIVING BETTER READING SCORES.

WE MADE HISTORIC INVESTMENTS IN SCHOOL FACILITIES THAT ALSO SERVED AS PROPERTY TAX RELIEF, AND WE ADDED MORE DISCRETIONARY FUNDING SO SCHOOLS CAN STAY FLEXIBLE TO LOCAL NEEDS.

I APPRECIATE DEBBIE CRITCHFIELD FOR HER STRONG PARTNERSHIP IN SUPPORTING EDUCATION.

SHE DESERVES CREDIT FOR ADVANCING NEW SOLUTIONS FOR SPECIAL EDUCATION STUDENTS IN OUR PUBLIC SCHOOLS.

DEBBIE, THANK YOU.

[ APPLAUSE ] >> EDUCATION HAS AND ALWAYS WILL BE MY TOP PRIORITY.

JOINING US TODAY ARE STUDENTS FROM EAGLE HILLS ELEMENTARY SCHOOL.

THEY ARE NOT JUST A SIX, SEVEN PROMPT.

[ LAUGHTER ] TO REMIND US WHY YOUNG PEOPLE ARE AT THE HEART OF EVERYTHING WE DO.

KIDS, CAN YOU GIVE A BIG HELLO TO THE LAWMAKERS.

STAND UP.% [ APPLAUSE ] OUR ENDURING IDAHO PLAN KEEPS PUBLIC SCHOOLS WHOLE, ENSURES CLASSROOM FUNDING IS PROTECTED.

IDAHO'S PUBLIC SCHOOLS ARE THE HEART AND SOUL OF OUR COMMUNITIES AND OUR CHILDREN ARE OUR FUTURE.

WHICH IS WHY EVEN IN THE YEAR OF REDUCED REVENUES, SCHOOLS REMAIN OUR TOP PRIORITY.

A STRONG ECONOMY FOR IDAHO NOW AND INTO THE FUTURE REQUIRES AN% ADAPTABLE WORK FORCE.

MORE IMPORTANT THAN EVER IN A WORLD WHERE JOBS SEEM TO BE CHANGING AT LIGHTNING SPEED.

OUR ENDURING IDAHO PLAN PRESERVES IDAHO LAUNCH SO WE CAN SUPPORT PRESIDENT TRUMP'S GOAL TO EXPAND THE WORKING CLASS.

THE PEOPLE WHO DRIVE OUR ECONOMY.

THE STRENGTH OF IDAHO'S FUTURE ALSO RELIES ON THE VITALIY OF RURAL COMMUNITIES IN THE AGRICULTURAL SECTOR.

THAT IS WHY OUR PLAN MAINTAINS THE WATER INFRASTRUCTURE INVESTMENTS WE FOUGHT FOR LAST YEAR.

THE ENDURING IDAHO PLAN DELIVERS FOR OUR FARMERS AND RANCHERS AND THE PEOPLE WHO FEED AND FUEL [ APPLAUSE ] AND OF COURSE, THE HEALTH AND THE WELL BEING OF THE PEOPLE IN IDAHO ARE KEY TO OUR LASTING SUCCESS.

THAT'S WHY OUR ENDURING IDAHO PLAN SAFEGUARDS ACCESS TO HEALTHCARE, PARTICULARLY IN RURAL COMMUNITIES.

WE KNOW THE AFFORDABILITY AND ACCESSIBILITY OF HEALTHCARE TOPS THE LIST OF CONCERNS FOR IDAHOANS RIGHT NOW.

OVER THE NEXT FIVE YEARS, THANKS TO THE LEADERSHIP AND VISION OF IDAHO'S CONGRESSIONAL DELEGATION AND PRESIDENT TRUMP, IDAHO WILL INVEST NEARLY $1 BILLION FEDERAL DOLLARS TO IMPROVE THE ACCESS AND AFFORDABILITY OF RURAL HEALTHCARE.

THIS INVESTMENT INCLUDES MORE THAN $150 MILLION TO STRENGTHEN THE HEALTHCARE WORK FORCE PIPELINE SERVING OUR RURAL COMMUNITIES.

AND THROUGH MY ENDURING IDAHO PLAN, WE WILL BUILD ON THE PROGRESS WE'VE MADE TO ADDRESS OUR PHYSICIAN SHORTAGE, COMMITTING ANOTHER $1 MILLION TO SUPPORT GRADUATE MEDICAL EDUCATION.

[ APPLAUSE ] THIS PLAN TACKLES ONE OF THE MOST IMPORTANT ASPECTS IN THE LIVES OF IDAHOANS WE SERVE, BECAUSE A HEALTHY IDAHO IS A THRIVING IDAHO.

MY FRIENDS, THE STATE OF OUR STATE IS STRONG.

WE DO FACE CHALLENGES, BUT WE'VE LAID A SOLID FOUNDATION FOR ENDURING AND LONG-TERM PROSPERITY.

THAT FOUNDATION WAS BUILT NOT BY TODAY'S LEADERS ALONE, BUT BY THE WORK OF THOSE WHO CAME BEFORE US.

GOVERNOR OTTER GUIDED IDAHO THROUGH THE MOST SEVERE ECONOMIC DOWNTURN OF THE CENTURY.

RE-ENFORCING THE PROPER ROLE OF GOVERNMENT, AND DRAWING A CLEAR LINE BETWEEN WHAT IS NICE AND NECESSARY.

GOVERNOR RISCH DELIVERED RECORD PROPERTY TAX RELIEF WHEN HOMEOWNERS BADLY NEEDED IT.

AND GOVERNOR KEMPTHORNE MADE LASTING FOUNDATIONAL IMPROVEMENTS TO THE TRANSPORTATION SYSTEM.

THE PROOF IS CLEAR, IDAHO'S FUNDAMENTALS REMAIN THE STRONGEST IN THE NATION.

HERE THAN ANYWHERE ELSE.

OUR UNEMPLOYMENT RATE IS AMONG THE LOWEST IN THE NATION.

WE LEAD IN PERSONAL INCOME GROWTH.

AND OUR ECONOMIC ACTIVITY CONTINUES TO OUTPACE MOST STATES, REFLECTING THE DIVERSE AND RESILIENT ECONOMY.

JOBS ARE GROWING AND IDAHO'S HEALTHY BUSINESS CLIMATE REMAINS A MAGNET FOR EMPLOYERS, TALENT, AND INVESTMENT.

I'VE SAID IT BEFORE AND I WILL SAY IT AGAIN, IF YOU ARE GOING TO BET ON ANY STATE, BET ON IDAHO.

AS WE APPROACH THE 250th BIRTHDAY OF OUR GREAT NATION, WE HONOR OUR PAST AS WE LOOK BOLDLY TO THE FUTURE.

WE WILL ROLL UP OUR SLEEVES AND GET TO WORK FOR THE PEOPLE OF IDAHO, GUIDED BY OUR VALUES, GRIT, FAITH, FAMILY, AND FREEDOM.

THANK YOU AND GOD BLESS IDAHO AND GOD BLESS THE UNITED STATES OF AMERICA.

[ APPLAUSE ] >> GOVERNOR BRAD LITTLE'S STATE OF THE STATE ADDRESS KICKING OFF THE 2026 LEGISLATIVE SESSIO.

I'M JOINED ON STATE BY KEVIN RICHARD OF IDAHO EDUCATION NEWS, DR.

STEPHANIE WITT, AND DIRECTOR LORI WOLFF.

I WANT TO START WITH YOU.

THIS IS A RARE STATE OF THE STATE AND BUDGET PROPOSAL WHERE WE ARE DISCUSSING THE CURRENT FISCAL YEAR AND THE UPCOMING ONE.

LET'S START WITH THE 2026 HOLD BACKS TO ADDRESS THE REVENUE SHORTFALL.

LET'S WALK THROUGH THAT.

HOW DO WE GET IN THE GREEN AGAIN?

>> SO WE STARTED THE YEAR IN AUGUST WITH OUR HOLD BACK, SEEING REVENUES AND THE GOVERNOR MENTIONED THIS.

WE HAD A 14% DECREASE FROM THE REVENUE PROJECTED IN JANUARY OF 25 WHEN LEGISLATURE STARTED AND THEY SET THE BUDGETS, TO AUGUST.

SOME OF THAT WAS TAX CUTS, SOME OF THAT WAS RIGHT SIZING.

KIND OF WHAT WE WERE SEEING IN SALES TAX REVENUE.

SO WE ACTED EARLY.

THE GOVERNOR ASKED FOR A 3% HOLD BACK ON EXPENDITURES FOR 2026.

EVERY STATE AGENCY, EXCLUDING PUBLIC SCHOOLS, TOOK PART IN THAT.

TO REDUCE THOSE EXPENDITURES.

WE ALSO LOOKED AT SOME ONE-TIME DEDICATED FUNDS.

WHERE WE WERE ABLE TO EITHER PAUSE INITIATIVES THAT WERE PASSED OR REPRIORITIZE.

SO WE DID DO PULL SOME ONE-TIME SPENDING OUT.

A COUPLE THINGS THAT GO TO THE GENERAL FUND TO HELP WITH THAT, EMPOWERING PARENTS.

THE LEGISLATURE PASSED A POLICY BILL LAST SESSION ENDING THAT PROGRAM.

>> AND THESE WERE GRANTS OF UP TO $1,000 PER STUDENT TO HELP PAY FOR CERTAIN EDUCATION EXPENSES THAT WAS PASSED DURING THE COVID YEARS?

>> THAT IS RIGHT.

AND LAST YEAR WITH THE EDUCATION TAX CREDITS THAT WERE PASSED, THE LEGISLATURE ENDED THIS PROGRAM.

SO THAT FUNDING OF ABOUT $30 MILLION WILL GO BACK TO THE GENERAL FUND.

WE ALSO HAD SOME MONEY THAT WAS APPROPRIATED LAST YEAR, SOME IN LOCAL WATER AND SEWER GRANTS, AND THEN IN SOME OF OUR TRANSPORTATION FUNDING.

WE PULLED SOME OF THAT MONEY BACK.

AND THEN THERE WERE SOME PROJECT.

A PERMANENT BUILDING FUND THAT DELAYED OR RE-PRIORITIZED.

>> AND THERE WAS $3 MILLION IN UNUSED SCHOLARSHIP FUNDS THAT WAS DIVERTED BACK.

IS IT TYPICAL FOR SOME OF THESE FUNDS TO GO UNUSED?

>> I WOULD SAY YES, THAT IS FAIRLY TYPICAL.

OPPORTUNITY SCHOLARSHIP I THINK FOUR OR FIVE YEARS AGO, THE UNUSED PORTION HAD JUST GROWN AND WE WENT AHEAD AND PULLED THAT BACK.

WITH PERMANENT BUILDING FUND, I THINK THE DIFFERENCE IS, WE HAVE CANCELED OR DELAYED PROJECTS ALL THE TIME.

TYPICALLY, PER CODE, THAT GOES BACK INTO THE PERMANENT BUILDING FUND TO BE REPRIORITIZED.

THIS YEAR WE ARE REQUESTING THAT GO BACK TO THE GENERAL FUND TO BALANCE THE BUDGET.

>> AND DR.

WITT WE WERE TALKING ABOUT THE 2026 BUDGET YEAR THAT WE ARE IN.

WHAT STOOD OUT TO YOU?

>> WELL, IT'S DIFFICULT TO MAKE CUTS IN THE MIDDLE OF A YEAR.

YOU KNOW, THE AGENCIES HAVE PLANNED OUT WHAT THEIR SPENDING WILL BE ACROSS THE YEAR.

AND SO TO HAVE A HOLDBACK OR A RESCISSION IN THE MIDDLE OF THE YEAR IS CHALLENGING.

THIS IS A VERY THOROUGH AND INNOVATIVE WAY TO GET MONEY BACK INTO THE GENERAL FUND, BUT THERE ARE THINGS THAT WILL SUFFER BECAUSE WE ARE NOT DOING THOSE THINGS.

SO WATER INFRASTRUCTURE PROJECTS AT A CITY MIGHT BE DELAYED FOR YEARS.

FALLOUT OF COMPLIANCE WITH EPA REQUIREMENTS.

THOSE ARE THE KINDS OF BIG TICKET SPENDING BILLS THAT CITIES AND COUNTIES ARE OFTEN UNABLE TO HANDLE ON THEIR OWN.

>> AND FOR VIEWERS WHO AREN'T FAMILIAR, WHEN WE ARE TALKING ABOUT GENERAL FUNDS, WE ARE TALKING SPECIFICALLY ABOUT TAX REVENUE THAT COMES INTO THE STATE TO PAY FOR SOME OF THESE PROGRAMS, DEDICATED FUNDS ARE THINGS LIKE VEHICLE REGISTRATION FEES TO PAY FOR TRANSPORTATION OR HUNTING AND FISHING LICENSES TO PAY FOR FISH AND GAME PROJECTS.

ALTHOUGH THE SCHOOL BUDGET WAS DIRECTLY AFFECTED, A LOT OF THE SAVINGS DID COME FROM EDUCATION RELATED BUDGETS THAT WEREN'T FULLY SPENT.

LIKE THE UNUSED OPPORTUNITY SCHOLARSHIP FUNDS.

OR $22 MILLION ADJUSTMENT IN PUBLIC SUPPORT UNITS.

UNITS RELATED TO DECLINING SCHOOL ENROLLMENT.

>> RIGHT.

AND I'M REALLY INTERESTED.

LET'S GO BACK A SECOND TO EMPOWERING PARENTS.

I THINK IT'S E LUSTLATIVE TO WHAT HAS HAPPENED SINCE APRIL.

BACK WHEN THAT PROGRAM WAS REPEALED, AND IT WAS REPEALED FOR POLICY REASONS.

NOT FISCAL REASONS.

IT CREATED THIS $30 MILLION POT OF MONEY THAT WE WERE START TO WONDER GOING INTO THE NEXT SESSION, WHERE WOULD WOULD THAT MONEY GO?

WOULD IT PUT INTO OTHER EDUCATION INITIATIVES?

OR OTHER LAWMAKERS PUT THAT INTO EXPANDING THE PRIVATE SCHOOL TAX CREDIT.

NOW IT'S BEING PUT INTO DEFICIT REDUCTION, SHORT FALL REDUCTION FOR THIS YEAR AND NEXT.

IT REALLY KIND OF ILLUSTRATES THAT WE ARE -- AND SOMETHING AN ALL HANDS ON DECK SITUATION HERE WHERE THE GOVERNOR IS TRYING TO TAP INTO A LOT OF OTHER FUNDS TO MAKE THE MATH WORK OUT FOR THIS YEAR AND NEXT.

>> AND WE CERTAINLY SEE SOME OF THOSE CREATIVE ALL HANDS ON DECK APPROACHES WHEN WE ARE LOOKING AT THE 2027 BUDGET PROPOSAL.

DIRECTOR WOLFF, CAN YOU WALK US THROUGH THE WAYS THE GOVERNOR TRIED TO GET THE BUDGET PROPOSAL RIGHT SIDE UP WITH REVENUE?

>> YEAH.

SO FIRST OF ALL I WILL START BY SAYING, SPENDING IS GOING TO TRACK WITH REVENUE.

IT'S NOT THE OTHER WAY AROUND LIKE WE SEE AT THE FEDERAL GOVERNMENT.

WHEN WE HAD TO MAKE SOME OF THESE DECISIONS, WE LOOKED AT THE PLACES WHERE EITHER PROGRAMS HAD NOT STARTED YET, LIKE THE LOCAL WATER GRANTS.

THEY HADN'T EVEN STARTED.

IT STARTED LAST SESSION.

OR LIKE EMPOWERING PARENTS WHERE A POLICY DECISION HAD BEEN MADE TO END THAT PROGRAM AND THE INVESTMENT LAST YEAR WAS TO OPEN UP EDUCATION TAX CUTS.

FOR 2027, I THINK THE GOVERNOR DID A GREAT JOB BALANCING BOTH SPENDING REDUCTIONS.

WE CONTINUE THOSE 3% ONGOING.

WE CONTINUED TO LOOK FOR ONE-TIME.

BUT HE WAS VERY INTENTIONAL AND DELIBERATE ABOUT THE THINGS HE WAS GOING TO PROTECT.

THOSE THINGS THAT HELP WITH FUTURE ECONOMIC GROWTH AND LONG-TERM SUSTAINABILITY.

AND THAT'S PUBLIC SCHOOLS, THAT'S LAUNCH AND WORK FORCE TRAINING, THAT'S OUR WATER INFRASTRUCTURE, WE PROTECTED THE FUNDING.

WE HAD ADDITIONAL $20 MILLION IN TECHOM.

AND HE WAS DELIBERATE ABOUT WHAT WE DID IN PUBLIC SAFETY.

BOTH STATE POLICE AND CORRECTIONS DID NOT MEET THEIR FULL 3%.

THAT WAS INTENTIONAL TO MAKE SURE WE PROTECTED IMPORTANT PROGRAMS THAT KEEP IDAHO SAFE.

>> AND FOR VIEWERS THAT ARE NOT FAMILIAR WHEN YOU SAY TECHCOM WE ARE TALKING ABOUT MITIGATION FUND.

THAT IS PROTECTED?

>> YEAH, SO LAST YEAR WE PASSED A BILL TO INCREASE FUNDING FORPHYSIAL YEAR 27 BY AN ADDITIONAL $20 MILLION.

AND WE KEPT THAT FUNDING IN PLACE IN 27.

>> WE ARE IN AN INTERESTING SPOT IN OUR STATE HISTORY WHERE WE CONTINUE TO SEE POPULATION GROWTH AND STRAIN ON OUR INFRASTRUCTURE.

WHETHER WE ARE TALKING ABOUT THE EVERY DAY WITH TRANSPORTATION AND ROADS AND PUBLIC SAFETY OR THE WATER PROJECTS WE DON'T NECESSARILY SEE.

WHETHER THAT'S AQUA RECHARGE, OR WASTE WATER FACILITIES, OR DRINKING WATER QUALITY.

>> YEAH.

MOST YEARS WE ARE $100 MILLION TO $300 MILLION BEHIND FOR NEEDED MAINTENANCE.

SO EVERY YEAR WE FALL BEHIND FOR A LARGE AMOUNT.

ANY YEAR WE ARE TAKING OUR FOOT OFF THE GAS TO TRY TO MEET THOSE NEEDS, MEANS WE ARE KICKING THE CAN DOWN THE ROAD A LITTLE BIT.

WE'LL TAKE CARE OF THAT AT SOME POINT IN THE FUTURE.

WHEN I CAN GUARANTEE YOU, IT WILL COST MORE AND MAY RESULT IN PUBLIC SAFETY IMPLICATIONS.

ROADS AND BRIDGES HAVE TO WORK.

SO IF THE STATE IS BALANCING ITS BUDGET BY NOT FUNDING THOSE THINGS, WHAT YOU ARE ESSENTIALLY DOING IS MAKING LOCAL TAXPAYERS SHOULDER THE BURDEN FOR THAT.

IF IT HAS TO HAPPEN.

IF THE BRIDGE IS FALLING DOWN, YOU CAN'T WAIT FOR ANOTHER YEAR.

YOU HAVE TO TAKE CARE OF THAT.

AND I JUST TO SAY, WE ARE TALKING ABOUT WAYS TO SOLVE THIS THAT ARE SOLELY ABOUT CUTTING.

WE HAD THIS MONEY TO PAY FOR THESE THINGS, AND WE GAVE IT BACK IN TAX CUTS.

THAT'S A POLICY CHOICE.

IT'S ONE WE ARE NOT TALKING ABOUT ANYMORE.

I JUST WANT TO POINT OUT, WE HAD THE MONEY TO PAY FOR MANY OF THESE THINGS, WE ARE IN A 6% CUT SCENARIO BECAUSE OF THE MAGNITUDE OF THE TAX CUTS.

EVEN SMALLER TAX CUTS WOULD HAVE MADE THIS EASIER TO DEAL WITH.

>> A POLICY DECISION THAT WAS VERY POPULAR WITH THE LAWMAKERS AND WE HAVEN'T SEEN PUBLIC POLICY POLLING ON THOSE TAX CUTS QUITE YET FROM BOISE STATE OR OTHER OUTLETS.

THAT IS ONE OF THE INTERESTING THINGS.

INFRASTRUCTURE ISN'T JUST PAID FOR BY STATE FUNDS.

LOCAL TAXPAYERS CAN ALSO VOTE TO PAY FOR SOME OF THESE PROJECTS.

THERE IS SOMETIMES FEDERAL FUNDS THAT ARE AVAILABLE.

SO THEN WE GET INTO THIS INTERESTING CONVERSATION ABOUT WHETHER OR NOTTHE LOCAL TAXPAYERS WILL VOTE TO PAY FOR THESE PROJECTS THEMSELVES AS OPPOSED TO TAPPING INTO THE STATE FUNDS.

I'M SEEING IN THE BUDGET REDUCING $10 MILLION FOR LOCAL DRINKING AND WASTE WATER PROJECTS.

A ONE-TIME REDUCTION OF $275 MILLION FROM THE IDAHO TRANSPORTATION DEPARTMENT'S STRATEGIC INITIATIVE FUNDS.

INCLUDING MORE THAN $100 MILLION FOR LOCAL HIGHWAY DISTRICTS.

SO AT WHAT POINT DO YOU LOOK FOR THAT MONEY ELSEWHERE AS OPPOSED TO A LOT OF IT COMING FROM THE STATE?

>> WELL, THE LOCAL TAXPAYERS ARE IN A TOUGH POSITION.

BECAUSE TO BOND FOR THAT KIND OF CONSTRUCTION, YOU OFTEN HAVE TO PASS A GENERAL OBLIGATION BOND.

WHICH REQUIRES A 66 2/3 APPROVAL.

EVEN IF A MAJORITY OF US WOULD VOTE YES, IT CAN BE REALLY DIFFICULT TO GET THE MONEY.

LOOK AT CANYON COUNTY.

I DON'T KNOW HOW MANY TIMES THEY TRIED TO PASS A BILL TO INCREASE THEIR JAIL SPACE AND THEY DIDN'T GET IT DONE.

SO I THINK THERE IS SOME CHALLENGING TIMES.

YOU SOLVE THE PROBLEM ON ONE LEVEL OF GOVERNMENT AND GET TO ENJOY THE TAX CUTS YOU HAVE GIVEN BACK TO PEOPLE.

WHO DOESN'T LOVE A TAX CUT?

BUT THE LOCAL LEADERS WILL BE STUCK WITH THE BILL.

>> I DO THINK IT'S IMPORTANT, JUST WHY WE ARE TALKING ABOUT INVESTMENTS AND INFRASTRUCTURE, TO REMEMBER OVER THE LAST FOUR YEARS IN TRANSPORTATION FUNDING ALONE, WE INVESTED $1.9 BILLION IN ADDITIONAL TRANSPORTATION FUNDING AND ABOUT 50% OF THAT WENT TO LOCALS.

WE HAD ABOUT $500 MILLION INCREASE IN THE WATER AND SEWER AT DEQ.

ADDITIONAL WATER RESOURCE MONEY OF A COUPLE $100 MILLION AS WELL.

OVER THE LAST FIVE YEARS THE AMOUNT WE INVESTED IN INFRASTRUCTURE AND DEFERRED MAINTENANCE HAS BEEN SIGNIFICANT.

WE HAVE NEVER HAD THAT TYPE OF INVESTMENTS IN THE PAST.

>> AND THAT IS WHY I'M SO SAD TO SEE US GIVE UP ON THOSE.

THOSE ARE IMPORTANT.

I WOULD ARGUE -- I WOULD LOVE TO BE WRONG ON THIS, BUT I THINK THE UNMET NEED CONTINUES.

WE WEREN'T CAUGHT UP.

WE WERE GETTING CAUGHT UP.

AND NOW WE ARE NOT.

>> THE DEFERRED MAINTENANCE BEING THOSE PROJECTS THAT WE HADN'T PAID FOR, BRIDGES WE HADN'T FIXED, ROADS WE HADN'T EXPANDED.

AND IT'S ALSO IMPORTANT TO NOTE TOO, THIS IS THE GOVERNOR'S PROPOSAL.

ALL OF THIS HAS TO GO THROUGH THE LEGISLATURE, THE LEGISLATURE WILL CONSIDER EACH ONE OF THESE BUDGETS INDIVIDUALLY, NOT JUST ONGOING MAINTENANCE, BUT ANY INCREASES OR DECREASES TO THAT FUNDING.

SPEAKING OF INVESTMENTS, WE HAVE EDUCATION.

PUBLIC EDUCATION UNTOUCHED ON ITS SURFACE, NOT THE CASE WITH HIGHER EDUCATION.

>> NO.

HIGHER EDUCATION HAS TAKEN HITS IN THE BUDGET CUTS WE SAW FROM AUGUST, AND THOSE ARE ONGOING CUTS.

AND WE SEE THAT THERE IS A CUT HERE IN TERMS OF ENROLLMENT, WORKLOAD ADJUSTMENT.

WE DON'T HAVE TIME TO EXPLAIN IT.

I DON'T KNOW HOW TO BEGIN TO EXPLAIN IT.

IT'S BASICALLY A FUND THAT HELPS COLLEGES AND UNIVERSITIES DEAL WITH ENROLLMENT GROWTH.

THAT IS GONE TOO.

SO HIGHER ED IS FACING A MUCH DIFFERENT BUDGET PICTURE.

AND AS WE TALKED ABOUT IN THE OPEN, ANYTHING THAT HAPPENS IN TERMS OF STATE FUNDING FOR HIGHER EDUCATION INEVITABLY IS GOING TO ADD PRESSURE TO INCREASE TUITION AND FEES, WHICH IN TURN INCREASES PRESSURE ON STUDENTS AND PARENTS TO PAY THE BILLS.

>> AND I BELIEVE THIS COMES AS GOVERNOR LITTLE SAYS HIGHER EDUCATION ENROLLMENT IS INCREASING WHILE THE REST OF THE NATION REMAINS STAGNANT OR DECREASING.

BUT YOU THEN HAVE THAT PRESSURE ON THE BUDGET.

>> YEAH.

AND THAT IS THE GREAT THING ABOUT PROTECTING LAUNCH.

LAUNCH IS PLAYING A SIGNIFICANT ROLE IN IDAHOANS BEING ABLE TO GO ON.

YOU SEE THEY DID SOME SURVEYS WITH IDAHO LAUNCH STUDENTS, AND ABOUT 50% OF THEM SAID THEY WOULD NOT OTHERWISE HAVE BEEN ABLE TO AFFORD TO GO ON IF IT WEREN'T FOR THAT SCHOLARSHIP.

>> KEVIN, AS A REMINDER, WHAT IS THE LAUNCH PROGRAM?

>> LAUNCH IS A POST-SECONDARY FINANCIAL AID PROGRAM THAT WAS STARTED IN 2023.

IT HAS BEEN VERY CONTROVERSIAL AT THE STATE HOUSE.

THERE ARE A LOT OF LAWMAKERS THAT HAVEN'T LIKED THIS IDEA FROM THE BEGINNING.

WE ARE TALKING ABOUT $75 MILLION A YEAR THAT GOES INTO THESE GRANTS FOR STUDENTS TO EITHER GO TO COLLEGE OR GO TO CAREER TECHNICAL PROGRAMS.

>> WE ALSO SEE ABOUT $1 MILLION, JUST ABOUT THE ONLY GROWTH IN THIS BUDGET.

PRETTY CLOSE TO ANY WAY.

ABOUT $1 MILLION IN THIS BUDGET FOR GRADUATE MEDICAL RESIDENCY.

CAN YOU WALK US THROUGH THAT?

>> THOSE ARE FOR MEDICAL STUDENTS THAT HAVE GONE THROUGH MED SCHOOL.

THEY ARE COMING BACK TO TAKE ON RESIDENCIES TO GET CLOSER TO BECOMING PRACTICING PHYSICIANS.

THIS IS NOT UNDERGRADUATE MEDICAL EDUCATION.

AND THAT IS WHAT WE HAVE TALKED ABOUT A LOT DURING THIS PAST LEGISLATION SESSION.

THROUGH THE UNIVERSITY OF WASHINGTON AND IDAHO.

THE OTHER MEDICAL SCHOOL SEATS THAT THE STATE BUYS THROUGH THE UNIVERSITY.

YOU TALK ABOUT THE QUESTION OF ADDING SEATS, ADDING SEATS AT WAMMY.

NOTHING IN THE BUDGET ADDRESSING THAT IN SPITE OF A LOT OF DISCUSSION ABOUT UNDERGRADUATE EDUCATION AND A TASK FORCE THAT MET IN THE FALL TO EXPAND.

>> AND SO MANY OTHER THINGS IN THIS BUDGET, BUT ONE THING THAT WAS NOT IN THERE AS WE TOUCHED ON BEFORE WAS REPEALING MEDICAID EXPANSION.

THAT IS NOT APLUNGE THE OPTIONS THAT -- THAT IS NOT AMONG THE OPTIONS THAT GOVERNOR LITTLE PROPOSED.

BUT THAT IS FROM THE DOGE TAX FORCE THAT MET LAST YEAR.

THERE ARE REDUCTIONS THAT AFFECT THE MEDICAID PROGRAM.

THE 4% ONGOING PROVIDER RATES.

THERE IS ALSO A $22 MILLION DECREASE IN GENERAL FUND MEDICAID FUNDING THROUGH SERVICE REDUCTIONS.

DO YOU KNOW WHAT THOSE REDUCTIONS ARE?

>> SO THE GOVERNOR RECOMMENDED AN ADDITIONAL REDUCTION IN MEDICAID SPENDING.

AS WE TALKED ABOUT MEDICAID IS THE FASTEST GROWING PART OF OUR BUDGET.

AND HE AGREES WE HAVE TO DO SOME THINGS TO SLOW THAT GROWTH.

THE OPTIONS THAT WILL BE BEFORE THE LEGISLATURE, THE DEPARTMENT SUBMITTED A LIST OF THOSE OPTIONS.

THOSE ARE PART OF THEIR BUDGET.

MOST DO REQUIRE STATUTORY CHANGES.

SO WE WILL HAVE TO WORK TOGETHER ON A POLICY BILL.

>> SO MANY OTHER THINGS TO GET THROUGH IN THAT SPEECH AND WE ONLY HAVE ABOUT 90 SECONDS LEFT.

BUT IT IS NOTABLE THAT ALL THREE IDAHO'S LIVING GOVERNORS WERE AT THE SPEECH.

GOVERNOR BUTCH OTTER, NOW SENATOR, FORMER GOVERNOR JIM RISCH, AND FORMER GOVERNOR DIRK KEMPTHORNE.

AND THE TAX CHANGES THAT WERE IN THAT BILL.

FEDERAL TAX CONFORMITY IS SOMETHING THAT HAPPENS EVERY YEAR, BUT THIS WAS A BIG ONE.

DIRECTOR WOLFF, CAN YOU BRIEFLY TELL US WHAT WE CAN EXPECT FROM THAT?

>> YEAH, TYPICALLY WE DON'T HAVE A SIGNIFICANT REVENUE IMPACT.

THIS ONE DELIVERS MORE TAX CUTS AT THE FEDERAL LEVEL AND IDAHO IS CHOOSING TO CONFORM.

YOU HEARD THE GOFF NEW YORK CITY -- THE GOVERNOR, HE WANTS IT FAIR AND PREDICTABLE.

WE HAVE WORKED TO GET A GOOD FISCAL NOTE, AND WE WILL WORK HARD TO GET THAT POLICY BILL THROUGH.

>> WE'LL HAVE MUCH MORE ON THESE PROPOSALS DURING THIS THURSDAY'S SHOW ON IDAHO REPORTS.

BUT THAT'S ALL THE TIME WE HAVE TODAY.

KEVIN RICHARD, DR.

STEPHANIE WITT, AND LORI WOLFF.

BE SURE TO TUNE IN THIS THURSDAY NIGHT AT 8:30 P.M.

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