Did you know that in the last 25 years Idaho’s annual state General Fund budget has grown from $360 million to over $2.1 billion? The state total fund budget has gone from $977 million to close to $5.5 billion during the same time period. Since FY 1980 the state’s General Fund budget has increased an average of 7.4% per year while the total fund growth rate has been 7.2% per year.

Why has Idaho’s state budget grown at such a fast rate? Two factors are population and inflation. During the same 25 year period Idaho’s population has gone from 939,000 in FY 1980 to an estimated 1,404,000 in FY 2005. That’s an increase of nearly 50%, or 1.6% per year. Inflation, as measured by the Consumer Price Index, has risen a total of 146%, an annual increase of 3.7%.

When adjusting for population growth and inflation, the state budget has still grown but at a much lower rate. Expenditures per Idaho resident adjusted for inflation reflects that the General Fund growth rate has averaged 2.0% per year while the total fund growth rate has averaged 1.7% per year between FY 1980 and FY 2005. The data is available in the table.

The data still leaves us with the fact that Idaho’s state budget even after adjusting for population growth and inflation has grown at an average rate of around 2.0% a year over the last 25 years. The reasons for this growth are many. One of the principal factors, however, is that the public has been demanding more and better services. The state has picked up funding responsibilities that used to be provided by local government. Federal programs and mandates have had a big impact on the state budget. The courts have also played a part in expanding state government. The bottom line is state government exists to serve the people. It’s growth is a reflection of the needs of society.

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