Idaho state revenue collections exceeded projections by $51.2 million during the first two months of fiscal year 2027, marking a second consecutive month of stronger-than-expected financial performance for the state.
The fiscal year began on July 1. In August alone, revenue beat forecasts by $37.5 million, driven largely by robust individual income tax collections that surpassed monthly projections by $40.8 million.
Projected Year-End Surplus
If current trends continue and remaining revenue meets existing forecasts, Idaho is projected to end the fiscal year on June 30 with a positive ending balance of $657 million. This figure would represent a surplus of more than $500 million compared to the budget set by lawmakers.
Last year, Gov. Brad Little and the Idaho Legislature implemented permanent budget cuts to fund tax reductions and balance the books. Those measures appear to have stabilized state finances, allowing for significant headroom in the current fiscal cycle.
Cautious Approach to Spending
Sen. Scott Grow, co-chairman of the Idaho Legislature’s Joint Finance-Appropriations Committee, said he is not eager to deploy the extra funds immediately. He noted that budget planning requires looking a year and a half into the future to account for potential volatility.
“My reaction was its very promising report, and I’m glad to see the individual income tax is up,” Grow said.
Grow pointed out that several unpredictable expenses could quickly erode the surplus. These include Medicaid costs, wildfire suppression efforts, state employee health insurance premiums, and corrections spending.
Corrections and Infrastructure Needs
The state’s prison system is currently at capacity. The Corrections agency plans to request $45.3 million to open three new facilities, a significant line item that could draw from the surplus if approved.
Grow also highlighted transportation as a potential area for reinvestment. He noted that the transportation budget was reduced significantly during last year’s legislative session.
“With transportation, we had to cut that (budget) pretty skinny last year,” Grow said. He suggested that lawmakers might discuss restoring those cuts if the surplus remains intact by year-end.
Legislative Outlook
The 2027 regular legislative session is scheduled to begin on Jan. 11 at the Idaho State Capitol in Boise. Lawmakers will likely review these early fiscal indicators as they prepare for next year’s budget deliberations.
For now, state officials are monitoring revenue streams closely, balancing the promise of a large surplus against the reality of rising costs in healthcare, infrastructure, and public safety.