Idaho Gov. Brad Little says JFAC’s budget changes could have unintended consequences – Idaho Capital Sun

Although he is prepared to work with whatever alterations legislators come up with, Idaho Gov. Brad Little said the changes that the Joint Finance-Appropriations Committee is making to the state’s budget process could have unintended consequences.

This year, the co-chairs of the budget committee, Sen. Scott Grow, R-Eagle, and Rep. Wendy Horman, R-Eagle, announced several new changes to JFAC. The co-chairs said the changes are designed to allow JFAC members to dive deeper into the budgets and spending requests, increase transparency and improve efficiency during the legislative session by moving budgets to the floor of the Idaho House of Representatives and Idaho Senate earlier in the session.

In an interview Wednesday at the Idaho State Capitol, Little said he doesn’t know exactly how JFAC’s budget and process changes will work or what some of the exact details will be in the end. One concern is it could make it more difficult to pass recommendations and requests for new funding

“But we don’t know what it is yet,” Little said.

The changes to JFAC include:

• The committee shortened the public portion of its daily budget meetings by about an hour and a half each day. Now, JFAC members spend about an hour and a half each day in public meetings where legislators listen to budget hearings led by a state budget analyst and have an opportunity to ask questions of department heads and agency directors. During the other hour and a half, JFAC members meet privately in smaller working groups, where they are actually writing the budgets.
• JFAC divided budgets up differently, separating out bare-bones maintenance of current operations budgets from the new spending recommendations and requests and line items that will now be considered separately. JFAC passed the bare-bones maintenance of operations budgets on Jan. 16 and will begin considering the line items this morning. 
• JFAC and the Idaho Legislative Services Office staff launched a new budget information website that is designed to make more budget documents and presentations available to the public and legislators in one place. 
• JFAC’s co-chairs will put spending limits in place that are designed to reduce the increases in state spending and leave funding available for legislative priorities that were not included in Little’s fiscal year 2025 budget request. 
• As part of a change that started last year, JFAC votes are announced jointly as a committee and separately by legislative chamber. If a budget receives support from a majority of the committee but does not receive a majority of votes from JFAC members in one of the legislative chambers, then that budget can be sent back to be reworked. For example, if JFAC’s Senate members voted 7-3 to pass a budget but JFAC’s House members split 5-5 over the budget, the budget could be sent back even though the vote of the full committee was 12-8 in favor of passing the budget. 
• In additional changes that will be implemented in the spring and the fall after the legislative session adjourns, JFAC members will participate in spring and fall working tours where they will go beyond the new spending increases and drill down into the “base” of the budgets to really scrutinize the existing components of each state agency’s budget. 

Idaho governor says JFAC’s long-established previous rules worked well

JFAC is different from many legislative committees because it includes 10 members each from the Idaho House and Idaho Senate. Most committees, like the House Health and Welfare Committee, only include members of one legislative chamber or the other. 

Before the changes were implemented, JFAC voted jointly as one committee. JFAC also considered the maintenance budgets and the new funding requests and line items together as one budget. 

Little said JFAC’s previous procedures and rules that were in place before the new changes were time-tested and well respected – with Idaho consistently setting balanced budgets and the state recently posting record-breaking $2 billion state budget surpluses.

“It is the most replicated system in the nation,” Little told the Sun. “When they started the joint process it wasn’t too long before I interned there in 1976, and ever since then it’s been very, very replicated. So if you are going to make a change, what are the intended and the unintended consequences? (There is also) the issue of who gets to define ‘maintenance?’”

One unintended consequence Little sees is it could be more difficult to pass the line items and new budget requests because the maintenance budgets are separated out and the line items are isolated.

“Here’s my experience,” Little said. “If I’ve got an agency who wants to do line items and the line item increases spending by 7 or 8%, a lot of times they look at the rest of the budget and say ‘well if you’re going to do this, maybe we can cut this (other area) back.’ But if everything else is set, that option is more difficult. When I’m setting the budget and they come in with their request, the agency request, I do that. I look and say, ‘well, if they want to do this, can I make up this difference (elsewhere).’”

Two examples of new spending requests that are not in the maintenance of operations budgets are a $6.6 million request for the state’s response to invasive quagga mussels detected in the Snake River near Twin Falls and Little’s 10-year, $2 billion proposal to repair and replace Idaho’s aging, crumbling public school facilities.

Even as these new changes continue to play out, Little said he is confident the state budgets will get set this year and he and his staff will be able to work with new procedures and budget formats JFAC implements.

“Obviously it’s totally their process and my (Division of Financial Management) staff, we’ll honor whatever they want to do,” Little said. “

Idaho Freedom Caucus member voices support for JFAC changes 

On Jan. 16, JFAC approved bare-bones, maintenance of current operations budgets that are designed to keep the lights on next year for state agencies. The maintenance budgets are basically a version of last year’s budgets put forward for next year with all of the one-time funding removed. The maintenance budgets reduce state general fund spending for next year by $46.6 million compared to the original budget JFAC set last year. 

In an interview Tuesday at the Idaho State Capitol, Sen. Scott Herndon, R-Sagle, said he joins many of his constituents and fellow Freedom Caucus members in the Idaho Legislature in supporting JFAC’s changes. 

Citing a presentation from Legislative Services Office budget and policy division manager Keith Bybee, Herndon told the Sun that JFAC only used to analyze about 19% of state spending. Meanwhile, Herndon said government spending grew by 54% between 2020 and 2024. JFAC’s new changes – from the working groups, to the maintenance budgets to the base budget deep dives – give legislators more ability to scrutinize the budget and zero in on new funding requests and line items. 

“This really puts us more into what our role is supposed to be,” Herndon said. “I would classify myself as 100% satisfied.”

“Most members of the Idaho Freedom Caucus are very much in favor of the changes for the same reasons I like the changes,” Herndon added. 

Herndon supports limiting growth in government spending and hopes to pass a new income tax cut this year, pushing the state’s flare tax rate of 5.8% even lower.

 “I want to see the trend come back to normal,” Herndon said. “We cannot cut taxes unless we cut spending. That’s the bottom line.”

Separating the maintenance budgets makes it easier to drill down deep and analyze the new spending requests, Herndon said. Then, he can vote against the ones he disagrees with without voting against an entire budget.

For example, last year Herndon voted against the K-12 public schools operations budget, Senate Bill 1206. Herndon told the Idaho Capital Sun he agreed with a lot of what was in the budget, but he disagreed with one of the funding request line items that was included and voted against the entire budget. 

Under JFAC’s new rules, Herndon already voted for the public schools maintenance of operations budgets. Now, he can vote against any new funding requests he disagrees with without having to vote against the maintenance of operations budgets.

“I suspect in future years agencies will be much more thorough in justifying their line item requests when they realize they will get a little more attention,” Herndon said.  

Herndon told the Sun he thinks the dustup over JFAC’s rules and voting is just a distraction. Herndon said the rules and voting procedures work because JFAC used them to set the entire state budget last year. If it isn’t about rehashing rules and procedural debates, Herndon said the real reason might be because somebody is worried that their budget won’t pass or worried that their line items will get shot down. 

What will it take to consider new spending requests in Idaho budgets?

Because funding is already provided for state agencies in the maintenance of operations budgets, JFAC members will likely have to vote to reopen each budget before considering the new funding line items. 

JFAC’s co-chairs, Grow and Horman, previously told the Sun they will first ask for permission to reopen the budgets in what is called a unanimous consent request. If any JFAC members objects to the request, Horman and Grow told the Sun it would take a simple majority vote to reopen the budgets and consider the new funding requests.

Perhaps offering a glimpse into the behind-the-scenes debate over JFAC rules, votes and procedures, Sen. Janie Ward-Engelking, D-Boise, has said publicly that she believes it takes a two-thirds majority vote to reopen any budgets to consider new funding requests. 

Ward-Engelking and other Democrats have told the Sun they are worried that JFAC’s new procedures to break the budgets into different pieces and separate out the maintenance budgets will make it harder to approve the new funding requests for next year’s budgets, and at the same time free up funding in the budget for legislative priorities that are not in Little’s budget, like a new tax cut or funding for school choice tax credits or voucher-like programs.