In February of 2008, Idaho budget officials detected initial effects of the nation’s economic woes on the state. During the rest of the year, state General Fund revenues fell below expectations. In September and December, Idaho Republican Governor C.L. “Butch” Otter ordered holdbacks for Fiscal Year (FY) 2009 and told agencies to prepare for more reductions for the following year. When the legislature convened in January of 2009, it had to tackle these matters.

This report examines the economic and revenue outlooks facing state budget officials in 2008 and 2009, actions of the governor and legislature, and their impact on state expenditures. First, however, it provides a profile of Idaho’s people, state politics, and budgeting process.