Idaho’s Revenue Beat Is Real. The Editorial’s Story About It Definitely Slanted Opinion.

Verdict

The editorial’s numbers are right. First-quarter General Fund revenue for fiscal year 2027 beat the forecast by $90.3 million (6.8%), September beat its month by $39.0 million, individual income tax is 18.3% ahead of forecast, and withholding grew 20%. The Division of Financial Management (DFM) reported those figures², and the Legislative Services Office (LSO), which reports to the Legislature, published the same figures the same day⁸.

The thesis built on them does not follow:

• The benchmark moved first. In August, DFM set the FY2027 forecast $291.1 million above the Legislature’s April estimate, and $251.6 million above its own January forecast^4,7,10. Its income tax line, the one the quarter beat by the widest margin, expected the first quarter to come in 7.6% below the year before². A beat against that line measures the forecast as much as the economy.
• One tax line carries the beat. Individual income tax is $92.2 million over forecast. Corporate income tax and sales tax are both below forecast², and the editorial mentions neither.
• Hiring is real but small. Nonfarm payrolls added 7,800 jobs (0.9%) in a year¹⁶. Withholding grew 20%. DFM’s own explanation is “lots of hours of work” and “some bonus activity,“² not a hiring wave.
• The surplus is mostly not new money. Of the $696 million projected for the end of the year, $258 million is last year’s leftover cash and $291.1 million is the August forecast’s margin over the Legislature’s estimate, not yet collected⁸.
• The cause is missing. The editorial praises the “difficult decisions"^1,14 that balanced the budget without saying that the gap those decisions closed followed the 2025 income tax cuts and the 2026 federal tax conformity bill, which opened most of it^12,23,25.
• The argument circles. It opens with “everyone wants to move to Idaho” and closes with “no surprise people want to live in Idaho,“¹ as if a revenue report proved migration.

The fair reading of the same report is narrower: Idaho’s economy is growing moderately, the state cut taxes and then cut spending to stay balanced, and one quarter of withholding came in far above a forecast that expected a decline. Whether that quarter was wages, hours, bonuses or timing is not knowable until the April 2027 filing season settles the income tax.

What the numbers say for the months ahead

• The next report is an easy bar. The October report, due around November 10 to 12, after the November 3 election²⁷, only has to beat a forecast set 1.7% above last October⁸. October alone would need a 22% miss to erase the year’s $90.3 million lead. The real test is the November forecast revision⁴: if DFM folds this quarter into a higher baseline, later “beats” shrink by design.
• The cushion is thinner than it looks. Last year individual income tax missed its November forecast by 5.7%⁵. The same miss on the rest of this year’s income tax forecast ($1,855.9 million)^2,4 is about $106 million, more than the whole $92.2 million first-quarter income tax beat. That is a stress test, not a forecast: last year’s miss followed HB 559, a mid-year tax change the November 2025 forecast did not include and the August 2026 forecast does, so a repeat would need a new surprise of the same size. Income tax refunds in July and August already ran 109% above last year³, and the April 2027 filing season will be the first under the 2026 federal conformity bill²⁵.
• Wages are a genuine strength. Idaho’s average weekly wage grew 6.2% in early 2026, the second-fastest among the states¹⁸, after 4.7% in 2025¹⁹, and unemployment is 3.6%¹⁶. With jobs up about 1%, total wages explain roughly 7 of the 20 points of withholding growth. The rest is hours, bonuses, tax tables or timing.
• “Fiscal responsibility” here is a policy choice. The state set revenue lower on purpose with tax cuts, then matched spending to it with holdbacks and 4% and 5% agency cuts^12,22. FY2027 appropriations are flat⁸ while the population grows 1.4% a year¹⁷, which is a real cut per person. A revenue report cannot prove that the choice was right; it can only show that the budget balanced.
• The same reasoning would have proven the opposite a year ago. In October 2025 the first quarter came in 6.8% below forecast and a $56.6 million deficit was projected^12,24. Measured the editorial’s way, that quarter would have “proven” a weak economy. The honest test of “strong” is revenue at constant tax law, per person and after inflation, set beside wages, jobs and personal income.

The numbers behind the headline

Idaho’s fiscal year runs July 1 to June 30. FY2026 ended June 30, 2026, and FY2027 began July 1, 2026, so its first quarter (July through September 2026) is complete and reported. Every “FY2027 actual” figure below is that first quarter only^2,8.

Every figure the editorial quotes matches DFM’s September report^1,2. The problem is selection. The same report shows sales tax and corporate income tax below forecast, online marketplace collections below forecast despite 23.4% growth, and a quarter only 3.7% above the same quarter two years earlier².

The two-year comparison crosses the 2025 income tax rate cut, from 5.695% to 5.3%²⁶, so it understates growth at constant law. Scaling the quarter’s individual income tax up by the ratio of the two rates puts it about 10.7% above FY2025, as an illustration only. The 20% withholding figure compares two quarters that both fall after the cut, so the rate change does not inflate it.

The editorial reports the first row and describes the third as healthy. It does not mention the fourth. Corporate tax has two signs: the quarter is below forecast, mostly on refund timing, but September alone beat its month by $9.6 million⁸ and the quarter is well above a depressed year.

The benchmark moved

“Above forecast” measures forecast error, not economic strength. In FY2026 the state cut its forecast by $416.5 million in two steps^12,13 and then beat the lowered number by $171.9 million⁵; against the original April 2025 forecast the year finished $245 million short. For FY2027 DFM’s August forecast came in $291.1 million above the Legislature’s April estimate and $251.6 million above DFM’s own January forecast^4,7,10, so the quarter that beat it by $90.3 million was measured against a higher bar, set after the tax cuts and after the holdbacks were known.

The upgrade came from corporate tax. Between DFM’s January 2026 forecast⁷ and its August revision⁴, the income tax line was cut and the corporate line raised. The income tax line is the one the quarter beat.

The full-year income tax forecast of $2,359 million is 0.5% below FY2026’s actual $2,371 million^4,5, which itself fell $143 million short of its November forecast⁵. The forecast put the expected decline in the first quarter (−7.6%) and expects the rest of the year about 1.6% above last year.

What the projected $696 million is made of

Only the $90.3 million is collected cash from beating the forecast. The uncollected share of the $291.1 million depends on the forecast holding. Claims are already pending for Medicaid, wildfire, state employee health insurance, corrections ($45.3 million for three facilities) and transportation²¹.

Projections like this swing fast. The FY2026 year-end balance was projected at a $439.8 million surplus in April 2025, a $56.6 million deficit in October 2025^12,24 and $72.4 million in May 2026¹¹. The FY2027 projection was $619.5 million in July 2026¹⁰, $657.0 million in August⁹ and $696.0 million in September⁸.

Withholding is not employment

The Governor reads 20% withholding growth as “Idahoans are working, businesses are hiring.“¹⁴ Businesses are hiring, modestly¹⁶. DFM’s own explanation of the jump is more careful:

Unemployment held at 3.6%. Jobs up about 1% and wages up about 6% put total wages roughly 7% higher, which explains about 7 of the 20 points of withholding growth. The remaining 12% or so is hours, bonuses, tax tables or timing (our arithmetic, comparing first-quarter 2026 wages with third-quarter 2026 withholding, so the quarters differ). The growth also climbed within the quarter: 10.7% for July, 15.9% through August, 20% through September², a step-up that fits timing or bonuses better than hiring. Withholding is a prepayment. The April 2027 filing season, the first under HB 559’s conformity to the federal tax changes²⁵, settles the account.

Housing: what the market shows

How do home sales compare, bought against sold and new against existing? Every closed sale has one buyer and one seller, so “bought versus sold” cannot differ statewide; what moves is how many homes sell, how many are listed and how much inventory is waiting. Idaho does not publish a statewide split of new and existing home sales: the Census Bureau’s new-home sales series is national and regional only, and the multiple listing service breakdowns cover the Treasure Valley.

Read together: statewide sales are up modestly on fewer listings and 14% less inventory, so homes are selling faster than they come on the market, and the statewide median price is rising about 4% a year. Permits are up about 6.5% for the year, so supply is responding, but not at the pace of sales. In the Treasure Valley, new-construction closings of roughly 1,750 a quarter against about 4,200 total closings put new homes near 40% of sales (our arithmetic from the two Intermountain MLS series^31,33), far above the national norm; no statewide equivalent exists.

Kootenai County, the newspaper’s own market, is reported by the same paper from the Coeur d’Alene Regional Realtors’ monthly report: sales through August up 4.3%, listings down 4.8%, and a record median of $569,945, up 7.3%³⁴. That report does not break out new construction or months of supply, and the paper noted two weeks later that a 7.125% mortgage rate was squeezing buyers at that price³⁶. None of this appears in the editorial. It supports the premise that people are still moving to Idaho, while the labor force decline in the same months¹⁶ shows that in-migration is slower than it was.

Truth table

Each factual claim in the editorial¹, checked against the document it rests on.

What the editorial leaves out

• The income tax forecast expected a decline. The first-quarter forecast was $503.1 million, 7.6% below the year before. The full-year FY2027 forecast of $2,359 million is below FY2026’s $2,371 million, and DFM cut it about $184 million between January and August^2,4,7.
• The comparison base was depressed. The first quarter of FY2026 was $81.7 million (6.0%) below FY2025, after the rate cut. Part of this year’s 10.2% gain refills that hole². The fair test is growth at constant tax law, which has not been published.
• Hiring is modest next to withholding. Jobs +0.9%, household employment −1.0%, labor force −1.0%, participation 61.5%. The gains are led by accommodation and food services (+2.4%), while professional and business services fell 0.5%¹⁶.
• What preceded the FY2026 shortfall. The 2025 tax cuts (HB 40’s rate cut from 5.695% to 5.3%, about $240 to $253 million a year, the $50 million school-choice credit, and more than $450 million in all) and HB 559’s conformity to the federal tax law (−$155 million in FY2026), passed over the Governor’s preferred July 1 start^23,25,26. They opened most of the gap; corporate payments $49.9 million below the year before added to it¹².
• The spending cuts in force. The 3% holdback of Executive Order 2025-02 (about $79 to $86 million), 4% permanent cuts ($131.3 million in FY2026) and 5% cuts in FY2027. FY2027 appropriations of $5,621.8 million are flat^8,12,13,22.
• Corporate and sales tax below forecast. The Governor’s release listed corporate tax¹⁴; the editorial dropped it. Sales tax is below forecast for September and the year to date, and online sales tax is 5.7% behind a forecast that assumed 39.9% growth in Tax Relief Fund receipts^2,9.
• What the $696 million is made of, and the claims already pending against it (above).
• Politics. The Governor is on the November 3 ballot, the Democratic candidate, Terri Pickens, would restore last year’s cuts, and the cautious first sentence of the Governor’s statement was cut^14,20,27.
• Timing. Income tax refunds in July and August were up 109%, $57 million of FY2026 refunds were postponed to July 1, and the November forecast revision will reset the benchmark^3,4,5.
• The long-run level. FY2026 revenue ($5,684.3 million) is 8.3% below FY2022 ($6,197.4 million⁷) in nominal dollars, and the FY2027 forecast is still 4.3% below FY2022, by design of the tax-cut path (our arithmetic^5,7).
• Editing. A sentence fragment (“Individual income tax Idaho Division of Financial Management forecast,”) ends the May paragraph, the election sentence is printed twice, and “There is good reason for that optimism” has no closing punctuation¹.

How the argument circles

Each claim is offered as evidence for the next, and the only measured input, the forecast beat, is measured against a benchmark the state set itself.

1. Step 1 Everyone wants to move to Idaho The opening premise.
2. Step 2 Good government: fiscal responsibility Offered as the reason people come.
3. Step 3 Revenue beat the forecast The one measured fact, against an August benchmark.
4. Step 4 Idaho is doing something right The beat read as proof of policy.
5. Step 5 Strong economy, people working Withholding read as hiring.
6. Step 6 No surprise people want to live in Idaho The conclusion restates the opening premise.

• Circular reasoning. The editorial opens with migration and closes with migration, and never ties migration to the revenue data. To close the loop it would need migration trends (3% growth in 2021, 1.4% in 2025)¹⁷ linked to fiscal outcomes.
• The forecaster grades itself. DFM, inside the Governor’s office, both sets the forecast and reports against it. LSO’s monitor confirms the figures⁸, but the benchmark is still DFM’s. “That is not something that can be easily dismissed” treats a beat against that benchmark as proof.
• A quarter against years. Withholding’s 20% is three months of growth, set beside two full-year rates (2.8% and 5.9%)². A single quarter swings far more than a year, so the “acceleration” is not a like-for-like comparison.
• Withholding is not jobs. Jobs up about 1% and wages up about 6% put total wages roughly 7% higher, which explains about 7 of the 20 points of withholding growth; the remaining 12% or so is hours, bonuses, tax tables or timing^2,16,18. Settling it needs Idaho wage data for the same quarter and the withholding-table changes.
• One quarter is not a trend. The first quarter is 22.4% of the year’s forecast revenue. A year ago DFM Administrator Lori Wolff warned, “we definitely don’t want to put too much weight into one month of revenue,“²⁴ and Sen. Scott Grow, co-chair of the Joint Finance-Appropriations Committee, said, “Two months do not a year make.“²³
• The cause is left out. Spending cuts restored the balance, but the gap they closed followed the state’s own tax cuts, which opened most of it. Crediting the cuts without naming what preceded the gap tells half the story.
• A chosen low point. May 2026 is presented as the “less rosy” moment, but FY2026 was $157.5 million ahead of forecast then^6,11. The real low was October 2025.

What happens next

These are the questions the September report cannot answer. Until they are, “the numbers” support a narrower claim than the editorial makes: Idaho is growing moderately, and its budget balances because spending was cut to fit revenue the state chose to lower.

This is a review of an editorial’s reasoning and sourcing. It is not a forecast of Idaho revenue and not financial advice.

Sources