Idaho’s State Spending Briefly Explained
The Idaho Freedom Foundation has written extensively about Idaho’s budget, and will continue to do so. Numbers and financial analyses can be difficult for people to understand who don’t focus on it. Let’s discuss some of the basics.
Let’s start with a few terms from the glossary of the Legislative Budget Book.
General Funds “consists of moneys received by the state from the collection of taxes, and certain licenses and fees not specifically appropriated to any other account, which are used to finance the general operations of state government.”
Dedicated Funds “consist of revenue received from a specified source or sources, and disbursed for a specific function of government as required by law (e.g., the State Highway Fund is partially a collection from motor fuels tax and vehicle registration fees and is dedicated specifically to state highway construction and improvements).”
Federal Funds “consists of moneys from the federal government for specified state services.”
Since the 2008-09 financial crisis and especially since COVID, General Funds have been increasingly transferred to Dedicated accounts, blurring the distinction between General and Dedicated Funds. This can make it difficult to track changes in overall spending, so the Idaho Freedom Foundation increasingly will refer to “State Spending,” meaning the combination of General and Dedicated Funds. When federal dollars are added to state funds, we get “All Funds,” meaning the combination of General, Dedicated and Federal Funds.
Why do these terms matter? Because in order to understand the growth in state government, you need to track changes in all three categories.
What you see is that all state spending is growing much faster than the General Fund line alone (see the table above). Also, the Federal Funds category also increased massively.
There are several different ways to describe the trend of government spending in Idaho. You could say that state spending is up 53% over the past five years. It would also be correct to point out that all spending is up 55% over the past five years. Both of these numbers are more comprehensive than just looking at the General Funds, which are up 35%. Advocates of increasing the size and scope of government have an incentive to look only at the smaller number..
Why make the distinction between state spending and all funds? It depends on the questions you want to examine.
If we wanted to compare Idaho’s government to the U.S. government, we would compare state spending to federal spending, as we did here.
Alternatively, if we want to simply describe the overall spending increase in Idaho, including the state’s increasing dependence on the federal government, then we review All-Funds spending, as we did here. Both comparisons would yield correct numbers.
Finally, please note that as federal COVID spending winds down in the 2024-25 fiscal year, lawmakers and citizens need to focus on getting state spending back on a lower growth path so as not to lock in the higher spending levels.
From idahofreedom.org