Governor Gives 2026 State of the State Address: A Few County Issues Mentioned

While only a few county issues were mentioned, those issues could have significant impacts on county budgets.

Governor Little’s State of the State address clocked in at just under 29 minutes with a theme of “Enduring Idaho.” The speech mainly focused on plans to balance the state budget while still fully conforming to the One Big Beautiful Bill.

The Governor kicked off the speech by recognizing the opportunities Idahoans have to celebrate America250. He touted his record regarding cutting regulations with the Red Tape Rollback plan and zero-based regulation.

He then talked about budget recommendations for FY 2026 and 2027, recommending “disciplined fiscal management and safeguards to Idaho’s AAA credit rating.” Governor Little proposed ongoing and one-time spending reductions.

One of the “one-time” reductions proposed will directly impact county, city, highway district, and state transportation infrastructure. While not mentioned in the State of the State Address directly, the Governor’s FY 2027 Budget Highlights proposes removing,

“$275 million from Idaho Transportation Department’s Strategic Initiatives Fund, including $110 million for local highway districts” (which includes counties and cities). The Governor intends for this fund reduction “to be a one-time reduction in transportation investments.” 

Once a funding source is removed from the state budget, it is very difficult to get it added back in, so this could be an ongoing impact that IAC will need help from our road and bridge counties to ensure their legislators understand the impacts of this funding loss. (Please reach out to Sara Westbrook for more information on the direct financial impacts listed by legislative district of the transportation funding cuts.)

Governor Little also spoke about his commitment to improving healthcare access and affordability, particularly in rural areas of the state. The state recently received a $925 million Rural Healthcare Transformation grant, which the legislature will need to grant federal spending authority for the state to utilize. The grant’s parameters were very clear: it can only be used for one-time projects, not for ongoing programs. In the grant application, the Idaho Department of Health and Welfare included a proposal for additional EMS funding to hire administrative staff to support local billing needs, allowing EMS volunteers to focus on helping people in need. The proposal said that this funding would be one-time money and that DHW intends to work with stakeholders to determine how to come up with ongoing funding for 2030 and beyond. 

Similarly, this one-time grant may be used to help convert to next-generation e911 across the state, with a similar commitment that the funds would only be used through 2030, meaning a new funding stream would have to be found after that to properly maintain the system.

More cuts will likely be proposed by the Idaho Legislature as they work to conform with the One Big Beautiful Bill and potentially propose another income tax cut. Please set up appointments to meet with your legislators and engage on these issues. If you have questions about the issues mentioned or any other policy issues, please reach out to the IAC Policy Staff.

Click here to view the Governor’s FY 2027 Budget Highlights Enduring Idaho Plan.

(Photo by Pat Sutphin for the Idaho Capital Sun)