Idaho closed out April with state revenue collections running well ahead of projections, leaving the state on track to finish the current fiscal year with a surplus rather than the deficit many had feared heading into 2026.

Total general fund collections for April reached $808.2 million, coming in $56.9 million above the forecast set by the Idaho Division of Financial Management. If revenues hold to projections through the end of June, the state expects to carry an ending balance of nearly $94 million into the next fiscal year. That would put the surplus at roughly $26.4 million above the fiscal year 2026 budget passed by the Idaho Legislature, according to the May edition of the General Fund Budget Monitor, published this week by the Idaho Legislative Services Office.

A Mixed Picture Inside the Numbers

The headline figure masks some notable divergences in the underlying data. Corporate income tax collections came in $135 million above forecast for the month. Individual income tax collections, however, fell $81.3 million short of projections, partially offsetting that corporate gain.

Year-over-year, April’s total collections were $52.6 million below what the state brought in during April 2025, a decline of 6.1%. April is historically one of the most closely watched months on the state’s revenue calendar because it captures the bulk of annual tax return filings.

State budget analysts flagged two items worth watching. Keith Bybee, the budget and policy analysis manager for the Idaho Legislative Services Office, noted that the state recently adjusted how it records sales tax collections and distributions from the Tax Relief Fund. Those changes shifted some revenue recognition earlier in the fiscal year, which affects how the April numbers read in context.

Analysts also cautioned that the state has not finished processing all tax returns. Officials do not yet know the full dollar amount of refunds that will be sent to taxpayers in May and June, the final two months of the fiscal year. Those refunds could narrow the projected surplus before the books close on June 30.

Context: Budget Cuts Were Already Locked In

The improved revenue picture arrives after the Idaho Legislature spent the 2026 session making across-the-board spending cuts to most state agencies. Lawmakers trimmed agency budgets by 4% during the current fiscal year and approved 5% cuts taking effect in the next fiscal year. Those decisions were driven by a combination of factors: concern about state revenue shortfalls, a desire to align state tax policy with federal tax reductions signed into law by President Donald Trump under the One Big Beautiful Bill Act, and a constitutional requirement that Idaho maintain a balanced budget.

Idaho’s constitution prohibits the state from spending more than it takes in, which means lawmakers cannot allow a deficit to develop without taking corrective action. Heading into the 2026 legislative session, the state had been projecting a year-end deficit. The budget cuts were the Legislature’s primary response to that risk.

Lawmakers Taking a Wait-and-See Approach

Sen. Scott Grow, a Republican from Eagle who co-chairs the Legislature’s Joint Finance-Appropriations Committee, had not responded to requests for comment as of Wednesday. But in a mid-April phone interview, Grow said he planned to keep a close eye on revenue trends and expressed measured optimism.

“It gives me some comfort because we’ve got a little more cushion there,” Grow said at the time.

With two months remaining in the fiscal year and some uncertainty still surrounding tax refund outflows, the final surplus number remains a projection rather than a settled figure. State officials will have a clearer picture once May and June collections are recorded.

For North Idaho communities that depend on consistent state funding for roads, schools, and public services, a year-end surplus is a better outcome than the deficit scenario the state was tracking just a few months ago. Whether the legislature revisits any of the agency cuts in light of improved revenue conditions remains to be seen in future sessions.

Category: Economy

Byline: North Idaho Republican Staff