Five Northern Idaho Counties Reject Panhandle Health District Budget Ahead of June 1 Deadline
SANDPOINT, Idaho — Commissioners representing the five northern Idaho counties voted 4-1 to deny the Panhandle Health District’s proposed Fiscal Year 2027 budget at a May 20 meeting, leaving the regional health agency facing a tight deadline to revise its spending plan before a state-mandated cutoff of Monday, June 1.
The rejected budget totaled $12,299,702, drawing from a combination of permit fees, licenses, health services revenue, and a planned draw of $443,630 from PHD’s reserves. The district had requested a combined county contribution of $2,216,903 from Benewah, Bonner, Boundary, Kootenai, and Shoshone counties — the same figure as the prior fiscal year.
Kootenai County, as the most populous jurisdiction, would have carried the largest share at $1,479,299, while Bonner County faced the second-highest contribution at $470,211. For all counties except Kootenai, those amounts actually reflected modest reductions of $1,000 to $2,000 compared to previous years.
Budget Built Around Clinical Expansion
PHD’s proposed spending plan was structured around an expansion of clinical services aimed at addressing what district leadership described as a growing chronic disease burden across the region. The plan called for hiring additional staff — including a social worker, two medical assistants, a nurse practitioner, and a public information officer — and adding naturopathic medicine offerings while increasing clinic days in each county.
PHD Medical Director Gregory Pennock argued the new hires would function as revenue generators rather than simple expenditures, with each clinical staff member expected to bring in roughly three times their salary through expanded patient capacity and insurance reimbursements. “So in the private sector, we look at clinical people as revenue generators, not as expenses,” Pennock stated at the meeting.
The budget also included a 2% cost-of-living adjustment for all PHD employees — a provision that proved to be a sticking point for several commissioners.
Commissioners Cite COLA Concerns, Environmental Services Frustrations
Bonner County District 1 Commissioner Brian Domke seconded the motion to deny the budget, explaining that approving a pay adjustment for PHD staff before Bonner County’s own budget process is complete — the county’s fiscal year begins October 1 — would create an unfair disparity if county employees did not receive similar consideration.
“I’m unwilling to create that potential inequity,” Domke said, acknowledging the situation presented no easy solution given the misaligned budget timelines required under Idaho Code.
The motion to reject was made by Boundary County District 2 Commissioner Tim Bertling, who argued the proposed budget did not adequately serve his county’s needs and called on PHD to refocus on environmental regulatory functions rather than clinical expansion. Shoshone County District 3 Commissioner Jeff Zimmerman echoed those concerns, citing ongoing challenges with illegal sewage dumping in his county.
PHD board and staff pushed back on those characterizations. Board of Health Chair Thomas Fletcher said commissioners had not raised such concerns during the lengthy budget development process. Environmental and Health Protection Division Administrator Jason Peppin stated his department was appropriately staffed across all five counties and that the budget was crafted to be cost-neutral in the septic program, with increased permit fees designed to fully cover processing and site-testing costs.
The lone dissenting vote came from Kootenai County District 2 Commissioner Bruce Mattare, who voted in favor of the budget.
Some commissioners also expressed concern that the addition of new clinical staff and expanded services could lead PHD to request higher county contributions in FY 2028, even if the current request held steady.
What Comes Next
Under Idaho law, counties are required to fund their health district, but the current standoff centers on how those dollars are allocated. PHD’s board of health is expected to present a revised proposal by June 1, and options under discussion include allowing counties to opt out of clinical services funding. Current service levels are not expected to be reduced in the near term, but without county backing, PHD’s planned clinical expansion — intended to draw more regional patients and broaden the district’s financial self-sufficiency — will be unable to move forward.
The outcome will have particular relevance for Bonner County residents who rely on PHD facilities for primary care services. Local officials and health district leadership will continue negotiations in the days ahead. For context on related county compensation decisions, see the recent Bonner County agreement to pay employees for PTO and CAT hours above the cap limit, and for broader Idaho health funding developments, see coverage of Gov. Brad Little’s veto of a bill cutting graduate medical education funding.