Idaho’s 2026 legislative session wrapped up last week after 81 days — eight days shorter than the previous year’s session — but the compressed timeline did little to reduce the intensity of debate over budget cuts, education policy, and tax conformity with federal law.

A Session Defined by Revenue Shortfalls

The session opened and closed against the backdrop of a state revenue deficit created in part by last year’s tax cuts. Legislative leaders and Gov. Brad Little sparred repeatedly over how deeply to cut state agencies, and where those cuts would fall. While K-12 public schools were largely shielded, higher education absorbed a disproportionate share of the reductions.

As Idaho Politics reported after adjournment, the session closed with sharp partisan disagreements over tax cuts and Medicaid reductions that defined much of the 2026 debate at the Statehouse.

K-12 Funding: Flat Is the New Cut

Public schools will receive $2.75 billion in state funding for fiscal year 2027 — the same as the prior year. Lawmakers rejected both Little’s proposed 3% cuts and deeper reductions passed by the Legislature, ultimately holding K-12 harmless from the broader budget-cutting exercise.

However, education advocates note that flat funding functions as an effective cut when operational costs — utilities, fuel, food — continue to rise with inflation. For the second consecutive session, schools saw no increase in state discretionary dollars, the flexible funding they typically use for day-to-day operating expenses. Some districts also face a $9 million shortfall in employee insurance funding.

Higher Education Takes the Hardest Hit

Colleges and universities bore the brunt of the budget reductions. Higher education will absorb a 4% budget cut in the current fiscal year. Looking ahead to the budget year beginning July 1, four-year institutions face a 5% cut, while two-year schools will see a 3% reduction.

Little also eliminated a $9.5 million line item intended to offset costs associated with enrollment growth, compounding the financial pressure on the state’s university and college system.

Idaho Launch Program Trimmed

Little’s postsecondary scholarship program, Idaho Launch, sustained two rounds of budget reductions — $10 million for the current year and an additional $10 million for next year. The second cut, which Little did not originally recommend, will leave approximately $65 million available for the Class of 2026. Little has since said he believes the reduced budget will be sufficient to cover applicant demand.

Federal Tax Conformity: The “One Big Beautiful Bill”

Aligning state tax law with President Donald Trump’s federal tax cuts emerged as one of the session’s most contentious debates. Lawmakers pushed to conform with the federal cuts and make them retroactive to 2025, ultimately overcoming resistance from Little. The conformity measure is estimated to remove $155 million from the current state budget, adding further uncertainty to the state’s fiscal outlook.

Virtual Schools and IDLA: Unfinished Business

Virtual education remained one of the most complicated and unresolved areas heading out of session. A bipartisan measure, House Bill 624, addressing concerns raised in a December state audit of Idaho’s largest virtual school passed unanimously and was signed by Little in March.

However, Little has yet to act on two other key pieces of legislation as of Thursday. House Bill 940 would cut the Idaho Digital Learning Alliance’s budget by roughly half — approximately $13.4 million — and restrict the scope of the state’s online learning platform. A companion budget measure, Senate Bill 1438, would cap IDLA enrollment in the next fiscal year. Little has until Tuesday to act on both bills.

Similarly, Little has until Tuesday to decide on a $3 million cut to virtual school funding — a fraction of the $23 million in reductions he originally requested.

Bills That Failed — and Could Return

Several policy proposals did not make it across the finish line, including mandates on school recess, school start dates, and student absences for protesting. Lawmakers and observers expect some of those measures to resurface in the 2027 session.

A handful of significant policy questions also remain in the governor’s hands following adjournment. Legislation restricting teachers’ union activities is among the bills awaiting Little’s signature or veto. Little has already vetoed five bills since the Legislature adjourned, citing child safety and fiscal concerns in his decisions.

What’s Next

With the Legislature adjourned, attention shifts to the Governor’s Office, where Little has an extended window to act on remaining legislation. Key deadlines fall Tuesday for the IDLA and virtual school bills. The state’s fiscal picture — shaped heavily by both the federal tax conformity measure and ongoing budget cuts — will likely set the table for the 2027 session and the broader election-year political environment in Idaho.