Budget Outlook

After two years of intensive work through the Budget Optimization Initiative, ISU entered FY2026 with a balanced budget- one year ahead of schedule. While this represents significant progress, the FY2026 budget is incredibly lean, with additional efforts needed to achieve long-term financial sustainability.

Despite a generally strong state revenue outlook, the State of Idaho has implemented a 3% ongoing reduction to appropriated funds and signaled the possibility of further cuts. Additionally, the state’s FY2027 budget follows a “maintenance-only” approach, with no additional funding to address enrollment growth, inflation, a 26% increase in health insurance costs, or Change in Employee Compensation (CEC). The total impact of these constraints creates an estimated $8 million funding gap for ISU. Compounding this, ISU must also plan for bond debt service for the new Life Sciences Building and the final phase out of the eISU fee.

On the revenue side, we are seeing positive developments, including increases in net tuition revenue and additional support from the Albion Institute. However, to fully address the projected deficit, ISU must implement meaningful, structural and operational changes to reduce the ongoing expenditure base.

This is a pivotal opportunity. By aligning our financial decisions with strategic priorities, institutional values, and our mission, we can not only solve this budget challenge—but strengthen ISU for the future. Achieving this will require the collective insight and engagement of the entire campus community.

For more information, please watch ISU President Wagner's video address from Oct. 15 2025.

3% Holdback Amounts

In August 2025, the state notified agencies of a 3% FY2026 holdback in response to state revenues coming in lower than projected.

ISU will meet the general appropriation holdback through a one-time reduction of operating budgets ($500,000) and additional scrutiny of OAR personnel actions to realize additional in-year salary savings ($2,634,500). On the operating side, all units are asked to limit discretionary spending this year. On the personnel side, Vice Presidents will work with their teams to redouble efforts in finding efficiencies through shared services, reorganization, and process improvement, and/or deferring filling vacant positions wherever possible.

Higher Education Research Consortium capital expenditure budgets will be reduced by the $27,700 holdback amount, and leadership from our special appropriations units (Career Technical Education, Idaho Museum of Natural History, Idaho Dental Education Program, and Family Medicine Residency) will work with their teams to realize holdback amounts through a combination of one-time salary savings, operating, and/or capital expenditures.

General Appropriation Operating Holdback Amounts by Division

Operating holdbacks were distributed by pro-rating the $500,000 goal against FY2026 adopted budgets for operating and irregular expenses after excluding the following:

• Adjunct Faculty
• Library Books/Subscriptions
• Fringe
• Student Scholarships
• Utilities and Insurance Graduate Assistantships
• Litigation Funds
• Mandatory Contracts
• Administrative Recovery
• Committed Capital Projects