Idaho Public Schools, Medicaid Program Told to Plan for New State Budget Cuts

Proposed 2% reductions could mean $55 million cut for K-12 and $19.9 million for Medicaid

Jan. 30, 2026 at 3:15pm

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After initially being protected from new state budget cuts, leaders of Idaho's public school system and Medicaid program are now being asked by state legislators to submit plans to cut their budgets by up to 2%, according to a new state budget memo. The proposed cuts come amid uncertainty over the financial impact of conforming to federal tax cuts included in the federal One Big Beautiful Bill Act.

Why it matters

The proposed budget cuts to public schools and Medicaid, two of Idaho's largest state-funded programs, could have significant impacts on critical services relied upon by students, families, and vulnerable residents across the state. Education leaders have expressed shock and concern over the reversal of previous promises to protect school funding.

The details

The 2% budget cut would represent a $55 million funding reduction for the K-12 public school system and a $19.9 million cut for the Division of Medicaid. The Idaho Department of Correction is still excluded from submitting plans for additional new budget cuts. The budget cuts are being proposed due to uncertainty over the financial impact of conforming to federal tax cuts included in the federal One Big Beautiful Bill Act.

  • On January 28, a memo calling for public school officials to submit plans for budget cuts began circulating.
  • On January 30, state agency directors were asked to submit new plans for additional budget cuts of up to 2% to the state.

The players

Misty Swanson

Executive Director of the Idaho School Boards Association.

Scott Grow

Republican state senator and co-chairman of the Joint Finance-Appropriations Committee.

Brad Little

Governor of Idaho who ordered all state agencies other than public schools to cut spending by 3% last summer.

Idaho Education Association

The professional association representing Idaho's public school teachers and education support professionals.

Idaho School Boards Association

The organization representing local school boards across Idaho.

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What they’re saying

“Permanent cuts to the budget for current year and FY27 budgets would be direct hits to critical services that Idaho students and families rely on every day, likely resulting in cuts to programs, staffing, and more.”

— Misty Swanson, Executive Director, Idaho School Boards Association

“In a year when every single dollar is so closely scrutinized and accounted for, why aren't lawmakers paying attention to the most unaccountable public funds they have appropriated?”

— Idaho Education Association

“Going backwards in school funding at this critical time is a step in the wrong direction and Idahoans need to be very concerned.”

— Misty Swanson, Executive Director, Idaho School Boards Association

What’s next

The Idaho Legislature will review the budget cutting plans submitted by public schools and Medicaid to determine if any budget cuts will be implemented.

The takeaway

The proposed budget cuts to Idaho's public schools and Medicaid program highlight the ongoing fiscal challenges facing the state, driven in part by previous tax cuts that have reduced state revenues. Education leaders are deeply concerned about the potential impacts on critical services for students and families.