Idaho ends Fiscal Year 2026 in strong financial position, maintains AAA credit rating

Boise, Idaho — Idaho closed Fiscal Year 2026 in a strong financial position, with General Fund revenues exceeding forecasts from both the Division of Financial Management (DFM) and the Legislature while maintaining one of the strongest fiscal outlooks in the nation.

Final General Fund collections finished approximately $171.9 million above DFM’s revised forecast and approximately $19.2 million above the Legislature’s forecast. Following year-end statutory transfers and reversions which returned unspent funds to the General Fund, approximately $250 million cash balance will be transferred to the General Fund for Fiscal Year 2027.

The year-end results mark the successful implementation of Governor Brad Little’s ENDURING IDAHO budget plan, a strategy built on disciplined financial management, targeted spending reductions, continued investment in Idaho’s highest priorities, and a commitment to maintaining structurally balanced budgets despite slowing revenue growth.

One year ago, Governor Little’s executive order, The Idaho Act, directed most state agencies to reduce spending, protecting Idaho’s long-term financial stability while preserving investments in education, transportation, water infrastructure, public safety, and rural healthcare.

“A strong economy is built on fiscal discipline. We acted quickly to align spending with the best information available. Some decisions were not easy but they were the right ones. We stayed disciplined, and as a result Idaho protected its priorities, maintained healthy reserves, and finished the year in an even stronger financial position than anticipated,” Governor Little said.

Although revenues exceeded expectations by year end, final collections remained within approximately 3 percent of DFM’s original forecast, reflecting both the inherent uncertainty of economic forecasting and the overall accuracy of Idaho’s revenue estimates during a period of changing economic conditions.

“Revenue forecasting isn’t about predicting every dollar perfectly. It is about providing decision makers with the best information available to responsibly manage taxpayer resources. Our budget recommendations reflected the economic conditions we were seeing at the time, and the Governor made prudent decisions to ensure Idaho remained structurally balanced. The fiscal year-end finish demonstrates both the resilience of Idaho’s economy and the value of conservative budgeting,” DFM Administrator Lori Wolff said. 

The positive year-end results also reinforce the long-term fiscal strategy outlined in Governor Little’s ENDURING IDAHO plan. Even while making targeted budget reductions, Idaho continued investing in priorities that support long-term economic growth, including public education, workforce development through LAUNCH, transportation, water infrastructure, rural healthcare, and public safety.

In addition, Fiscal Year 2026 also marked a record year for returning money to Idaho taxpayers. The Idaho State Tax Commission issued more than $910 million in individual income tax refunds during the fiscal year — the largest amount ever returned in a single year. The milestone reflects Idaho’s continued commitment to returning taxpayer dollars to Idahoans through Idaho’s historic tax relief efforts and efficient tax administration.

IDAHO MAINTAINS AAA CREDIT RATING

The state’s financial strength was further validated this month when Moody’s Ratings reaffirmed Idaho’s AAA credit rating with a Stable Outlook.

Moody’s cited Idaho’s:

• Consistently strong economic performance
• Conservative budget management
• Strong financial operations, reserve balances, and liquidity
• Low long-term liabilities
• Continued investments in growth and infrastructure
• Demonstrated willingness to make timely budget adjustments to maintain long-term fiscal stability

The report also recognized Idaho’s strong governance, noting the state’s disciplined financial management, prudent reserve policies, effective liquidity management, and history of responding quickly to changing economic conditions to maintain balanced budgets.

“Independent recognition from Moody’s reinforces what Idaho taxpayers have come to expect – responsible financial management and long-term planning. Our statewide financial systems, strong internal controls, and collaborative approach to fiscal oversight help ensure Idaho remains one of the best-managed states in the nation while maintaining the flexibility to respond to changing economic conditions,” Idaho State Controller Brandon Woolf said.

Although Fiscal Year 2026 ended ahead of forecast, state leaders emphasized that Idaho’s approach will remain unchanged.

Revenue growth has moderated following significant tax relief and broader economic normalization, while demands for investments in education, healthcare, transportation, and public safety continue to grow.

“The lesson learned from this year is that discipline matters. The same principles that allowed Idaho to deliver historic tax relief and strong reserve balances also allowed us to navigate a more challenging budget year without sacrificing our highest priorities. That’s what the ENDURING IDAHO plan is all about – making responsible decisions today so Idaho remains strong tomorrow,” Governor Little said.

FY2026 FINANCIAL HIGHLIGHTS

• General Fund revenues exceeded DFM’s revised forecast by approximately $171.9 million
• General Fund revenues exceeded the Legislature’s forecast by approximately $19.2 million
• Approximately $250 million will transfer to the General Fund for Fiscal Year 2027
• Idaho maintained its AAA credit rating with a stable outlook from Moody’s
• Moody’s cited Idaho’s strong economy, disciplined budgeting, healthy reserves, low long-term liabilities, investments in infrastructure, and strong governance as key credit strengths
• The Idaho State Tax Commission issued more than $910 million in individual income tax refunds, the largest amount ever returned to Idaho taxpayers in a single fiscal year

Fiscal Year 2026 demonstrated that Idaho’s financial strength is built not on favorable economic conditions alone, but on a consistent commitment to disciplined budgeting, conservative financial management, and strategic investments that position the state for long-term success.