When Governor C.L. “Butch” Otter submitted his budget for Fiscal Year (FY) 2009 in January of 2008, Idaho’s budget skies were sunny and its seas calm. He expected adequate revenues to fund major priorities. A month later, as state lawmakers started to decide on appropriations, the budget waters got choppy and storm clouds appeared on the horizon, formed by the nation’s economic problems. Otter and legislators learned that General Fund revenues would be scarce. Our report examines the economic and revenue contexts for FY 2009, highlights of the governor’s budget and the lawmakers’ appropriations decisions, and some initial impacts. First, however, it describes Idaho’s people, politics, and formal budget process.