Revenue Forecasts: Who Makes Them and How to Read the Monthly Report

Every Idaho budget fight starts with a number that has not happened yet. The Legislature meets from January to roughly March or April, and it must decide how much to spend in a fiscal year that begins July 1 and ends the following June 30. Nobody knows what income tax, sales tax and corporate tax payments will be by then. So the state guesses, in public, using economists, committees and a vote. The guess matters because the Idaho Constitution, Article VII, section 11, says no appropriation may be made, and no expenditure authorized, that would make the state's spending in a fiscal year exceed the tax then provided for by law, unless the Legislature provides a sufficient levy. Lesson 5 covers that rule in depth. This lesson covers the guess.

Three bodies, three jobs

The constitution does not name a forecaster. Practice has settled on three roles.

Body	Who it is	What it does with the number
DFM, Economic Analysis Bureau	Part of the Executive Office of the Governor. As of October 2026 the bureau lists Chief Economist Greg Piepmeyer and Economist Erin Phipps. The DFM Administrator is Lori Wolff.	Builds the revenue side of the Executive Budget, publishes economic forecasts, and prepares the monthly General Fund Revenue Report. DFM says the bureau has primary responsibility for the revenue side of the Executive Budget.
EORAC	A joint committee of eighteen legislators. For 2026 the co-chairs were Sen. Kevin Cook and Rep. Jeff Ehlers. Members include JFAC members and other legislators.	Hears economists and industry speakers in mid-January, collects an estimate from each member, and reports a median to the leaders and JFAC co-chairs.
JFAC	Ten senators and ten representatives. Co-chairs in 2026 were Sen. Scott Grow and Rep. Josh Tanner.	Votes on which revenue number the budget will be built on. Its choice is the practical ceiling for appropriations.

The Legislative Services Office (LSO) staffs the legislative side. Its Budget and Policy Analysis division, managed by Keith Bybee, writes the General Fund Budget Monitor and the Sine Die budget packet, both of which compare the revenue estimate with spending. DFM's forecast is the governor's. The legislative number can match it, beat it or fall below it.

What EORAC actually does

EORAC's 2026 report begins by saying its role is to advise the Legislature on the reasonableness of the governor's revenue projections. The committee met January 14 and 15, 2026. On the first day it heard from LSO, from DFM's Erin Phipps, from a Zions Bank economist, the Idaho Department of Labor, Idaho Power, a University of Idaho agricultural economist, university budget staff, the Associated Taxpayers of Idaho, and the Idaho State Tax Commission. On the second day members submitted ballots. Each of the eighteen members wrote down an estimate for FY 2026, FY 2027 and FY 2028. Three of the presenters (the universities, the Associated Taxpayers of Idaho and the Tax Commission) also filed estimates, which appear in the report next to the members' and the governor's.

The report's own rule is worth memorizing: the committee median is the average of the ninth and tenth estimates when the eighteen member estimates are placed in order. That is different from the committee average, which the same table prints separately (for FY 2026, $5,655.3 million against a median of $5,665.1 million). The estimates in January 2026 ran from $5,413.7 million (the lowest member, Sen. Camille Blaylock) to $6,060.5 million (the Tax Commission, the highest of any participant) for FY 2026. The governor's number sat second from the bottom, tied with Sen. Glenneda Zuiderveld at $5,512.6 million.

General Fund revenue, in millions	FY 2026	FY 2027	FY 2028
Governor's projection	$5,512.6	$5,679.2	$5,913.9
EORAC median	$5,665.1	$5,816.6	$6,081.5
Difference	$152.5	$137.4	$167.6
Percent over the governor	2.8%	2.4% (corrected)	2.8%

Source: EORAC Final Report, January 16, 2026. The FY 2027 line has a wrinkle. The report's cover letter shows 2.8 percent for all three years, but 137.4 divided by 5,679.2 is about 2.4 percent. The report's own detail page and the JFAC minutes of January 19 show 2.4 percent for FY 2027. The dollar figures were not in doubt. DFM's own report and LSO's packet print the governor's FY 2026 figure as $5,512.4 million, a $0.2 million rounding difference from the EORAC table.

Why JFAC might not use the governor's number

The governor's budget message arrives in January with a revenue forecast built by DFM. JFAC is not required to use it. The January 19, 2026 minutes show how the choice is made, and the procedure has its own vocabulary.

Rep. Steve Miller first asked for unanimous consent to adopt the EORAC report. Sen. Jim Woodward objected and asked for more discussion. Miller then moved to adopt, and Sen. Cook made a substitute motion to accept. Rep. James Petzke pointed out that the committee could do both. LSO's Keith Bybee explained the difference: if JFAC accepts the report, the EORAC projection is used for future consideration; if JFAC adopts the report, it chooses EORAC's recommended revenue amount. The chair called a short recess, and when the meeting resumed both motions were withdrawn by unanimous consent. A new motion by Cook to accept failed on a roll call, 8 ayes to 12 nays. Miller then asked again for unanimous consent to adopt, Sen. Janie Ward-Engelking objected, and Miller moved to adopt. The vote was 20 to 0. Co-chair Tanner said the figure was based on December 2025 revenue numbers that were higher than expected and called it still a conservative projection.

JFAC's 2026 timing was also different from 2025, when the committee adopted its revenue target on March 5, day 59 of the session, a delay that members of both parties criticized, according to the Idaho Capital Sun. In 2026 the vote came on day 8. The minutes record Tanner saying the order was deliberate: set projected revenue first, then deal with tax conformity, then set budgets.

Why a legislator would want a different number

Members who voted for the higher figure gave different reasons, as reported in January:

• Sen. Melissa Wintrow (Senate Minority Leader) said the higher number suggested deep budget cuts might not be necessary.
• Rep. Kyle Harris said a higher target leaves more room for tax cuts and for fully conforming to the federal One Big Beautiful Bill Act changes.
• Rep. Rod Furniss said he wanted a larger ending cash balance as a cushion.
• Sen. Woodward, whose own FY 2026 estimate ($5,540.0 million) was below the committee median, objected to adopting the figure by unanimous consent and asked for more discussion. The Capital Sun reported that he hoped a higher figure would mean more money for wildfire suppression and transportation.
• Co-chair Tanner pointed to the Tax Commission's $6.36 billion FY 2027 estimate as a reason the adopted number felt safe.

A higher adopted forecast permits more spending or more tax cuts before the books show a shortfall. A lower one forces cuts earlier. Reasonable people can want either, and a forecast is a tool used in that argument as well as a prediction. That is also why the monthly reports get so much attention afterward: they are the first scorecard.

How DFM builds the forecast

DFM presented its baseline to EORAC on January 14, 2026. It breaks General Fund revenue into the main taxes and a few smaller categories, with history beside each forecast:

DFM baseline, in millions	FY 2025	FY 2026 forecast	FY 2027 forecast
Individual income tax	2,418.9	2,514.1	2,543.1
Sales tax	2,079.4	2,223.0	2,400.1
Corporate income tax	890.6	497.3	462.4
Product tax	67.0	66.8	68.7
Codes, fines and fees	178.8	191.3	190.3
Miscellaneous	41.9	19.9	14.6
Total	5,676.6	5,512.4	5,679.2

Source: DFM presentation to EORAC, January 14, 2026. Check the arithmetic: 2,514.1 + 2,223.0 + 497.3 + 66.8 + 191.3 + 19.9 = 5,512.4. The FY 2025 total on DFM's slide is $5,676.6 million, which differs from the totals printed elsewhere for FY 2025: DFM's own chart on the previous slide shows $5,866.3 million, EORAC's history chart uses $5,887.0 million, and LSO's monitor shows $5,877.3 million. The reports do not say why. Definitions, accounting changes and later revisions are the usual causes, which is a reason to name the source whenever you quote a prior-year total.

The slides show the main ingredients. DFM forecasts the Idaho economy (nonfarm jobs and average wage rates, with history from the Idaho Department of Labor), then translates it into tax collections using the pattern of past years. One slide, titled "Predicting Income Taxes," shows how income tax collections build over a fiscal year in earlier years, with a section on filling in two years of data. Another explains how refunds work in the accounting: a share of income tax is sent to a refund fund, refunds are paid from it, and the difference accrues back to the General Fund or draws it down. A third explains that online marketplace sales tax flows first to a Tax Relief Fund, where 20 percent goes to the School District Facilities Fund and $139 million goes to set distributions, with the remainder to the General Fund up to a cap.

Those details matter for one reason. Two numbers that look like the same thing, such as "sales tax," can differ depending on whether the Tax Relief Fund transfer is counted in sales tax or in miscellaneous revenue. The LSO monitor says the revised forecast treats Tax Relief Fund transfers to the General Fund as sales tax revenue instead of miscellaneous revenue. DFM's June report says the same, and notes a prior-year revision for the same reason.

The 2026 forecast surprise

The January 2026 numbers have a clear lesson. The first column is DFM's forecast (which DFM's June report calls the November forecast), and the second is the actual result when the fiscal year closed.

FY 2026, in millions	DFM forecast	Actual	Difference	Percent
Individual income tax	2,514.1	2,371.3	-142.8	-5.7%
Sales tax	2,223.0	2,205.1	-17.8	-0.8%
Corporate income tax	497.3	820.5	+323.2	+65.0%
Product and miscellaneous	278.0 (product 66.8 + miscellaneous 211.3)	287.4	+9.4	+3.4%
Total	5,512.4	5,684.3	+171.9	+3.1%

Source: DFM General Fund Revenue Report, June 2026. In DFM's table, "miscellaneous" includes codes, fines and fees (191.3 + 19.9 = 211.2 in the January baseline; DFM's June table prints the predicted figure as 211.3). Sum check on the differences: -142.8 - 17.8 + 323.2 + 9.4 = 172.0, which rounds to the $171.9 million total.

The total beat the forecast by 3.1 percent. The parts did something quite different: two categories missed on the low side, and one, corporate income tax, beat its forecast by 65 percent. DFM's own summary of the year says unforeseen timing affected revenue in mostly modest ways, except in corporate, where the effect was major. It points out that corporate collections were down for the first five months (about $115 million from July to November) and then reversed ($215 million in December alone, and more than $200 million in April). It also describes timing items inside individual income tax: $57 million in refund payments were postponed until a July 1 emergency transfer to the refund fund, and a $39 million transfer from the Tax Relief Fund occurred at the close of the fiscal year instead of the start of FY 2027.

A reasonable summary: forecasters were right about the size of the whole and wrong about the mix. Anyone reading only the total would miss that. Anyone reading only the individual income tax line would see a 5.7 percent miss and could draw the wrong conclusion about the year.

One more wrinkle for careful readers. The Legislature subtracted $155 million for H.B. 559 (federal tax conformity) from its FY 2026 revenue estimate at sine die, taking the $5,665.1 million figure to $5,510.1 million, according to LSO's packet. DFM's January figure had no such line. A comparison of "forecast versus actual" is only fair when both sides include the same tax law. When you see someone say a forecast was "right" or "wrong," ask which version of the forecast and which law.

FY 2027 so far: three numbers for the same year

For FY 2027 the same pattern repeats, with a new August forecast layered on top. LSO's budget monitor of September 15, 2026 shows how the figures relate:

FY 2027 General Fund revenue estimate, in millions	Amount	What it is
Governor's January 2026 projection	5,679.2	DFM forecast in the Executive Budget
EORAC median, adopted by JFAC	5,816.6	Before tax law changes
H.B. 559 conformity	-175.0	Cost in FY 2027 per LSO
H.B. 967 (liquor distribution)	-1.93	Per LSO
Legislative revenue estimate at sine die, April 2, 2026	5,639.7	5,816.6 - 175.0 - 1.93 = 5,639.67
DFM August 2026 revised forecast	5,930.8	$291.1 million above the legislative estimate, 4.5 percent above FY 2026 actuals as LSO measures them

Source: LSO Sine Die packet (April 2, 2026) and FY 2027 Budget Monitor (September 15, 2026). Check: 5,930.8 - 5,639.7 = 291.1. The LSO monitor lists FY 2026 actual collections as $5,675.5 million, while DFM's June report shows $5,684.3 million. The two agencies count a few items differently (DFM's report refers to revisions for cost-accounting revenue and for showing the Tax Relief Fund transfer as sales tax), so quote the one you are reading.

The LSO monitor shows what that change in the forecast did to the picture. At sine die the projected FY 2027 ending cash balance was $148.8 million. After the August forecast, a larger starting cash balance and August revenue results, LSO projected $657.0 million, a difference of $508.2 million. The pieces were: starting cash balance up $208.1 million, revenue up $342.3 million ($291.1 million from the new forecast and $51.2 million from results so far), a smaller transfer from the Budget Stabilization Fund (down $24.8 million), and $17.4 million of additional estimated spending (carry-overs). Check: 208.1 + 342.3 - 24.8 = 525.6, and 525.6 - 17.4 = 508.2. The projection assumes monthly revenue follows the new forecast for the rest of the year, which is an assumption and not a result.

Reading the monthly General Fund Revenue Report

DFM publishes a General Fund Revenue Report each month, a few weeks after month end (the September 2026 report was reported as of 11:45 a.m. on October 9, 2026, and the June report as of 4:25 p.m. on July 17, 2026). It has a page of narrative, a chart, and a table with two blocks: the month, and fiscal year to date. Learn the columns and the rest follows.

Column	Meaning
actual (for prior years)	What was collected in the same month or year to date one and two years earlier
actual (current)	What was collected
predicted	DFM's forecast for that month or period, spread across the year
diff	Actual minus predicted. Negative numbers are shown in parentheses in some reports and with a minus sign in others.
% diff	The difference divided by the predicted amount
% ch	Change from the same period in the prior year, a different comparison from % diff

Misses and beats: what the record shows

Forecasts miss in both directions. Several recent examples, each from a primary or reported source:

• FY 2021: On July 1, 2020 the governor ordered a 5 percent reduction in General Fund spending authority (Executive Order 2020-14), and in a July 16, 2020 letter DFM told the State Board of Examiners it expected a statewide FY 2021 revenue decrease of between $350 million and $595 million because of COVID-19. DFM's July 2021 revenue report says the state had just crossed $4.0 billion in General Fund revenue in FY 2020 and reached $5.0 billion in FY 2021, an increase of roughly a quarter. The caution was reasonable at the time; the outcome was far better than feared.
• FY 2025: In the budget monitor released June 12, 2025 (covering May), state revenue was $141.5 million below the Legislature's projections, up from a shortfall of about $97.7 million a month earlier, according to the Idaho Capital Sun.
• FY 2026, first eight months: LSO reported in March 2026 that revenue through February was $89.5 million below the forecast JFAC adopted in January, and projected a $44.1 million FY 2026 deficit if the shortfall continued and no action was taken. DFM said it was too early to project a deficit because April and June usually bring in much higher collections. Both were right about their own claims: the gap was real in March and April was large (LSO's monthly series shows April 2026 at $799.6 million, about 14 percent of the year). The year closed at $5.684 billion against DFM's $5.512 billion forecast.
• FY 2027, first quarter: +$90.3 million, or 6.8 percent, ahead of DFM's August forecast through September, driven by individual income tax. The quarter is only about 22 percent of the forecast year ($1,326.3 million of $5,930.8 million), and withholding growth of 20 percent over the first quarter of FY 2026 is far above the 2.8 percent of FY 2026 over FY 2025 and the 5.9 percent of FY 2025 over FY 2024. DFM's report says employees appear to be getting lots of hours of work and that some employers may be paying bonuses, so part of the gain may not repeat.

Check the third item's baseline, because it shows a trap. LSO's March figure measures against the forecast JFAC adopted. DFM's monthly report measures against DFM's forecast. They were different numbers by $152.5 million for the full year, so the same collections can look like a $89.5 million shortfall in one document and a smaller one (or a surplus) in the other. Always say which forecast a "shortfall" is measured against.

The EORAC report is humbling in another way. Its last page plots each year's original projections beside actual collections from FY 2015 to FY 2025, including JFAC's chosen number and the university, governor and EORAC estimates. Individual estimates for FY 2027 in January 2026 spanned from $5,566.7 million (Sen. Blaylock) to $6,362.5 million (the Tax Commission), which is $795.8 million. Forecasting is hard. It is also done by people with different incentives and different information, and the useful habit is asking what each assumed.

Questions and answers

Where do I find the governor's revenue forecast?

In the Executive Budget document the governor sends the Legislature within five days of the start of a session, as Idaho Code 67-3506 requires, and in DFM's economic forecast and General Fund Revenue Book on the DFM Economic Publications page. The DFM site was showing a banner in October 2026 that document search listings were temporarily unavailable, so the file links in this lesson's sources are the dependable route.

Who decides which forecast the budget uses?

JFAC does, by vote. In 2026 it adopted EORAC's median, 20 to 0, on January 19. Appropriation bills then pass both chambers and go to the governor, who can sign or veto them.

Is EORAC set in the Constitution?

No. The constitutional text relevant here is Article VII, section 11, which does not mention a forecasting committee. EORAC is a joint legislative committee that meets each January, and its own report says its role is to advise on the reasonableness of the governor's projections. The sources checked for this lesson did not include a statute creating it, so this lesson does not say where its authority is written down.

What is the difference between accepting and adopting the EORAC report?

Per LSO's explanation in the January 19 minutes, accepting means the EORAC projection is used for future consideration, and adopting means JFAC chooses EORAC's recommended revenue amount. In 2026 JFAC did the second.

Why does EORAC use the median?

With eighteen members guessing, one extreme estimate can pull an average. The median of the ninth and tenth ranked estimates ignores the extremes. EORAC's report prints the average too, for FY 2026 $5,655.3 million against the median of $5,665.1 million.

Why do the reports use "predicted" instead of "forecast"?

It is DFM's label for the month-by-month version of its forecast. The monthly pieces add to the annual forecast. For FY 2027, DFM's monthly predictions for July, August and September were $348.0 million, $440.2 million and $538.1 million, which add to $1,326.3 million, the year-to-date predicted figure in the September report.

How often does the forecast change?

DFM revised its FY 2027 forecast in August 2026, and its June report says a new August forecast would be detailed in the next release. The governor's January figures and the Legislature's April sine die estimate are fixed in time. No published schedule of forecast updates was verified for this lesson, so check the Economic Publications page for the current one.

Does a higher forecast mean taxes will go up or down?

Neither by itself. A forecast is an estimate of revenue under current law. Tax changes passed by the Legislature move the estimate, as H.B. 559's $155 million cost in FY 2026 and $175 million in FY 2027 did. Lesson 7 covers tax cuts and fiscal notes.

Hard questions

"Why not just use the governor's forecast and stop arguing?"

Article VII, section 13 says no money may be drawn from the treasury except under appropriations made by law, so spending authority is set by the Legislature, and a reasonable inference (this lesson's, not a statement from the committee) is that it wants its own view of the revenue that supports it. The counterargument, from advocates of a single forecast, is that two forecasts invite choosing the more convenient number. Both positions are fair, and the record shows both in action: in 2026 JFAC's choice was higher than the governor's, and the year ended higher still.

"Was JFAC's higher number the right call?"

For FY 2026 the actual result of $5.684 billion landed above both numbers: $19.2 million above EORAC's $5.665 billion and $171.9 million above DFM's $5.512 billion, but the $155 million conformity cost came after the January votes, so the two comparisons are not on the same law. For FY 2027 it is open. The Legislature's own estimate was $5,639.7 million after conformity, and DFM's August forecast is $5,930.8 million. Early results support the higher number, but one quarter is not a year.

"Don't the forecasters have a stake in the answer?"

Everyone in the process has a view about spending and taxes, and the January 2026 comments show it: some members wanted a higher figure to avoid cuts, others to make room for tax cuts, others a lower one to build cushion. The protections are transparency (the ballot with each member's number is published) and the scorecard (monthly reports against the forecast). A reader who follows both can see who was close.

"If revenue is up, why were budgets cut?"

Because the cuts were decided in early 2026, when revenue was behind the forecast JFAC adopted and the Legislature had also committed to a $155 million tax conformity cost for FY 2026. Revenue through February was $89.5 million below the forecast, LSO projected a $44.1 million FY 2026 deficit in March, and the Legislature passed a 4 percent cut for FY 2026 and 5 percent for FY 2027 for most agencies. Later results ran higher. Sen. Wintrow said the state should restore revenue rather than cut further; the Capital Sun reported that DFM Administrator Lori Wolff said several times during the session that the extra 1 percent cut was unnecessary; JFAC co-chair Sen. Grow was quoted in March as saying "We will leave with a balanced budget, there is no need to worry." Lesson 5 gives the details of the cuts and their legal basis.

"Can I trust the monthly numbers?"

They are preliminary in the sense that they are the state's first count, reported on a stated date and time, and DFM revises prior-year comparisons for accounting reasons. They come from the agency that also makes the forecast, which is a reason to cross-check with LSO's budget monitor. The two sets of numbers matched closely for September 2026 (the monitor's FY 2027 forecast column for the month, $538.1 million, equals DFM's predicted figure) and differed slightly on FY 2026 actuals ($5,675.5 million against $5,684.3 million).