By Logan Finney and Melissa Davlin, Idaho Reports

As federal grant recipients in Idaho scramble to figure out how a federal freeze on grants and loans will impact their programs, the state Division of Financial Management has instructed agencies not to use state general fund money to offset any losses from a federal freeze on loans and grants.

The freeze, set to go into effect at 3 pm MT on Tuesday, would affect the distribution of existing grants and loans, as well as the issuance of new awards. It has the potential to affect trillions of dollars across the nation. It isn’t yet clear how the freeze will impact Idaho, but state agencies, local government entities, and federal grant recipients in the public and private sector reached by Idaho Reports were spending Tuesday morning trying to figure out which of their programs are affected.

Meanwhile, a federal judge has ordered a stay on parts of the order until Monday, according to CNN. The order says federal grants that are already appropriated can go out, but doesn’t halt the freeze on new grants or loans. The ruling comes after a non-profit group filed a lawsuit on Tuesday.

On Tuesday morning, Lori Wolff, administrator for the Division of Financial Management, sent a memo to executive agency directors asking them to review the impact of the federal action on their own budgets, and to report any issues to their DFM budget analyst as soon as possible.

In the memo, she also reminded state agencies that they are prohibited from using state funds to offset federal losses. That prohibition includes payroll advances for employee positions funded by federal grants.

“Idaho has prepared for times like these. All federal grants received by state agencies have an approved exit strategy,” Wolff wrote. “Please refer to those strategies in your contingency planning. All state agencies who receive federal grants or assistance that are affected by this Federal action will submit a letter signed by the agency director to DFM outlining an exit strategy in the event federal funds are not available.”

The Division of Financial Management operates under the direction of Governor Brad Little.

“The Governor’s Office and the agencies within the Governor’s administration are examining the temporary pause on certain federal grants and financial assistance programs to ensure consistency with President Trump’s policies,” press secretary Joan Varsek said in an emailed statement. “Governor Little is all in on President Trump’s efforts to rein in federal spending. As Governor Little has stated many times in the past, Idaho is better positioned than any other state to handle changes at the federal level because of how well we have managed government and the budget at the state level.”

UNCERTAINTY IN PUBLIC AND PRIVATE SECTORS

Nearly every agency and association director reached for comment on Tuesday told Idaho Reports that they were still trying to figure out how the freeze will impact their programs.

In a Tuesday memo to school districts and charter schools, Superintendent of Public Instruction Debbie Critchfield said the US Department of Education told the Idaho State Department of Education that the temporary spending pause applies only to discretionary education grants, and does not impact Title I programs for low income students, the Individuals with Disabilities Education Act, or other formula grants, nor does it apply to Federal Pell Grants and Direct Loans under the Higher Education Act.  

“This clarification is helpful and appreciated but questions remain,” Critchfield wrote in her memo. “We will continue to work to gain additional clarity and pass it along to you as we receive it.”

Critchfield told districts and charters to “proceed with caution” before making financial commitments related to federal funds.

Individual assistance including social security, Medicare, food stamps, welfare benefits, and assistance going to individuals is not affected, said White House press secretary Karoline Leavitt during a Tuesday media briefing.

“Major programs like Medicaid and SNAP are carved out,” Idaho Department of Health and Welfare director Alex Adams told Idaho Reports. He also shared an OMB document that says funds “for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused.”

Adding to the confusion, states are reportedly losing access to the Medicaid management portal amid the funding freeze, despite reassurances from the White House that Medicaid is not affected. Those portal issues, however, may be unrelated, according to a message from Adams.

“System maintenance is in progress – we expect it to be resolved shortly,” Adams wrote in a text message to Idaho Reports.

Adams later confirmed to Idaho Reports that the department was enrolling new Medicaid recipients and had issued its Medicaid payments Tuesday afternoon.

Christine Pisani, executive director of the Idaho Council on Developmental Disabilities, said she and her colleagues in other states had a meeting planned later in the day, and she hoped to receive more information then. Pisani added that she had received assurance that the freeze would not affect ICDD payroll.

Lee Flinn, director of the Idaho Suicide and Crisis Hotline, told Idaho Reports she was also still learning more.

Jason Lantz, director of marketing and communications for the Idaho Housing and Finance Association, said they are actively seeking guidance from their attorneys as well as the US Department of Housing and Urban Development.

“At this point it’s unclear if, or how, the federal funding freeze will affect the programs Idaho Housing and Finance administers,” Lantz wrote in an email to Idaho Reports. “Until there is more clarity, we intend operate normally.”

Laila Kral, executive director of the Local Highway Technical Assistance Council, was unsure how transportation funds from the Biden administration’s Infrastructure Investment and Jobs Act will be affected by the freeze.

“It’s been unclear – because that’s a previous authorization – if that will remain untouched for right now or not,” Kral said. “We’ve got a lot of active projects in the state and a lot of grant projects that are funded that have been awarded, but their agreements aren’t completed, so those cannot move forward. A lot of these communities in Idaho receive these federal grants and it’s unclear if their projects are going to happen.”

The federal action impacted grants for power utility companies as well.

“The executive orders have led to a pause on funding for several projects in which Idaho Power is participating, including the rebuild of a transmission line between Oxbow Dam and Lewiston,” Idaho Power communications specialist Sven Berg told Idaho Reports over email. “We will continue to monitor these projects, their funding status, and other potential impacts to determine the best path forward for our customers.”

Kelley Packer, executive director of the Association of Idaho Cities, said the cities are working to categorize their local infrastructure projects based on funding sources.

“The National League of Cities is monitoring those so that they can give updates on when those funds are released again, if those funds are going away, and what our other options would be in place,” Packer said. “Right now, it’s kind of an unknown. We don’t know if this pause is temporary, or if it’s a pause that will turn permanent for some of these programs. We don’t know what to expect.”

Packer said Idaho’s cities would lose billions of dollars if federal funding is not released.

“You have big transportation projects already going in the state that have federal funds,” Packer said. “Some of it could be emergency service needs, like fire trucks and police fleets and other things. I mean, there’s a lot of different funding sources that the cities reach out for to help subsidize the dwindling property tax money they receive.”

Idaho’s county officials are holding their legislative conference this week. “I haven’t had a chance to dig into the impacts,” Idaho Association of Counties executive director Seth Grigg told Idaho Reports over text.

It’s also unclear how the freeze may affect the state’s current budget setting process for the upcoming fiscal year, happening over the next weeks in the Joint Finance-Appropriations Committee.

“We are awaiting additional guidance from the federal government on what this means for Idaho’s budget process,” committee co-chair Rep. Wendy Horman, R-Idaho Falls, told Idaho Reports on Tuesday morning.

Idaho Reports is also compiling information on approximately how much state, local and non government entities receive in federal grants and loans that might be affected by this action.

Editor’s note: Idaho Public Television is a public agency under the Idaho State Board of Education.

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