Secretary of State budget hearing highlights SB108 funding shift and election-cost shortfalls

The House Appropriations & Finance Committee examined the Secretary of State's FY26 budget amid a statutory change that moved many direct election costs into a dedicated election fund created by Senate Bill 108 (Laws 2024, ch. 24).

Nut graf: LFC and the executive recommended different baselines after the SB108 change. LFC adjusted the agency's operating budget to remove election reimbursement dollars and recommended a 12.3% increase in remaining operating costs; the executive recommended more funding to cover personnel and system ownership costs. The office said an outstanding negative cash balance for the statewide election fund remains from FY24 obligations and warned Help America Vote Act (HAVA) federal funds that have funded security and systems work are likely to diminish.

Key details: LFC analyst Emily Hilla summarized the baseline adjustments and explained that the LFC's FY26 recommendation supports "the operating day-to-day" costs with elections removed, while the executive funded more personnel and IT contractual needs. The Secretary of State's deputy and CFO described a recent launch of a new business filing system and ongoing work on a campaign finance replacement and voter-mapping contracts. The office said the executive recommendation would better fund system ownership, maintenance and security-related infrastructure.

Election fund and cash flow: Officials said the statewide election fund owed reimbursements from DFA for county election expenses; the office reported a temporary negative cash position pending those reimbursements. The office requested special appropriations to cover FY24 shortfalls and contested increased election cost drivers such as higher poll-worker pay, new statutory requirements (more recounts, permanent absentee lists, expanded training and notice requirements), and redistricting-based changes that increased per-election costs.

Systems and security: The office requested phased funding for campaign finance (EPICS) replacement and a special appropriation to migrate on-prem systems and Active Directory into a DoIT-managed cloud/security framework. Officials noted HAVA grants funded many security improvements but cautioned that those federal funds are near depletion and cannot be relied on indefinitely.

Committee action and follow-up: Committee members pressed for documentation on FY24 reimbursements and for the office to provide more detailed line-item costs; the committee adopted the LFC recommendation for the Secretary of State while signaling follow-up in working groups.

Ending: Deputy Secretary Sharon Pino asked the committee to consider the long-term implications of shifting election funding from the operating budget into the dedicated election fund and to anticipate continued requests related to security, systems and reimbursements for direct election costs.