- Idaho General Fund revenue topped the first-quarter FY2027 forecast by $90.3 million, or 6.8%.
- Income-tax withholding rose 20% year over year, while corporate receipts fell 7.9% short of forecast.
- Governor Brad Little urged spending restraint as lawmakers await more revenue data before the fiscal year ends June 30, 2027.
Governor Brad Little announced October 9 that Idaho General Fund revenue topped the state’s FY2027 first-quarter forecast by $90.3 million, or 6.8%, as withholding gains lifted collections. The results came from the Idaho Division of Financial Management’s September report.
The fiscal year began July 1, 2026. September alone finished $39 million above forecast, approximately 7.3% higher than expected.
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Little welcomed the revenue growth but called for restraint in making spending decisions.
“Idaho’s strong revenue growth is encouraging and reflects the strength of our economy, but we must remain disciplined and make spending decisions based on what we can responsibly sustain.”
He also credited earlier budget choices with improving the state’s fiscal position, while saying Idaho should protect long-term stability and prioritize investments. Little said withholding growth showed residents were working and businesses were hiring. The increase was sharp by recent standards.
Withholding lifted income collections as corporate receipts fell short
Individual income-tax collections ran 18.3% above the year-to-date forecast. Withholding climbed 20% in the first quarter compared with the same period in FY2026, after growing 2.8% in FY2026 and 5.9% in FY2025.
The state’s results diverged across revenue sources. Miscellaneous receipts beat projections, but corporate collections and sales taxes lagged.
| Revenue source | First-quarter or year-to-date result |
|---|---|
| Individual income tax | 18.3% above forecast year-to-date; withholding up 20% year over year |
| Miscellaneous revenue | $10.9 million above forecast, or 14.8% higher |
| Corporate income tax | $10.2 million below forecast, or 7.9% below expectations |
| Sales tax | Slightly below forecast year-to-date |
The report identifies withholding as a driver of the income-tax result. The figures do not, on their own, establish whether the increase came from higher wages, more hours, bonuses, employment growth or a combination of factors.
The gap between tax categories leaves the first-quarter surplus dependent on more than a broad rise in receipts. Individual collections and miscellaneous revenue are running ahead, while corporate and sales-tax results are not.
The first two months had already put revenue ahead
The September total followed a strong start to the fiscal year. By the end of August, collections had already exceeded projections by $51.2 million.
August alone came in $37.5 million above forecast. Individual income-tax collections for that month exceeded the monthly projection by $40.8 million.
September added another $39 million above forecast to that running lead. The Division of Financial Management will continue issuing monthly revenue reports as the fiscal year progresses.
Budget restraint remains the state’s instruction to agencies
Lori Wolff, administrator of the Idaho Division of Financial Management and state budget director, has urged caution despite the better revenue numbers. In August 2026, she said executive agencies had been told to prepare budgets that would “keep the lights on,” without room for program growth or new spending.
The direction follows a period of cuts and spending controls. Idaho enacted more than $400 million in tax cuts during the 2025 legislative session. Federal tax cuts also took effect during the summer after that session.
Those reductions contributed to concerns about balancing the budget and led to agency spending holdbacks in the prior fiscal year. The latest results improve on the outlook in August 2025, when state projections anticipated little revenue growth and Little ordered holdbacks.
Costs remain. Public education, Medicaid and state prisons are among the state’s nondiscretionary obligations, while agencies have been told to prepare maintenance-level budget requests.
“The difficult decisions we made last year put us in a stronger fiscal position, and we need to continue prioritizing the investments that matter most to Idahoans while protecting our long-term financial stability.”
A legislative budget leader urged lawmakers not to spend early
Scott Grow, a Republican state senator from Eagle and co-chair of the Idaho Legislature’s Joint Finance-Appropriations Committee, called the early FY2027 performance “very promising.” He said he was pleased by the higher individual income-tax collections.
Grow also cautioned lawmakers against spending the additional revenue immediately. If a surplus remains at the fiscal year’s end, he said he would like lawmakers to consider restoring transportation funding cut in the previous budget cycle.
The result is an early revenue reading, not a guarantee that the state will finish the year with the same margin. Tax collections can shift, and the current budget instructions remain focused on core operations.
June’s balance and the January budget will depend on later collections
Idaho’s fiscal year ends June 30, 2027. An earlier state projection estimated a possible $657 million positive ending balance if revenue meets forecasts for the rest of FY2027. That would be more than $500 million above the enacted budget position.
The estimate depends on future collections. Corporate-tax weakness, sales-tax performance, changes in employment or wages, and the effects of recent tax cuts could change the year-end balance.
Little is expected to present budget recommendations for the 2028 fiscal year when the Legislature convenes in January 2027. Those recommendations will follow the first-quarter report, but lawmakers will have months of additional revenue data before the fiscal year closes.
The September report was the final scheduled monthly revenue report before Idaho’s November 2, 2026, election. The state’s next monthly updates will track whether the early lead holds.
