The Legislative Finance Committee’s capital outlay subcommittee heard a staff preview of the committee’s budget guidelines and asked staff for follow-up analysis on compensation costs, transportation maintenance and possible federal policy impacts.

The preview is meant to set the committee’s broad direction to staff ahead of formal guideline adoption later in the summer. "These guidelines serve an important purpose where they're essentially direction to staff on how you want us broadly to develop staff recommendations for your consideration," Director Salih told the committee as he walked members through the draft.

Why it matters: the document is not a budget; it signals priorities and limits that will shape staff recommendations. Staff said the guidelines will be updated after official revenue estimates and that members will have another briefing before the August meeting when the panel will consider approving the guidelines.

Key elements of the draft included a request that staff prioritize use of non‑general fund sources before the general fund, continued emphasis on education and health care, and language encouraging that agency‑led program expansions demonstrate multi‑year effectiveness before those programs are moved into recurring base budgets. "If an agency outside of workload ... wants to expand a program ... you gotta demonstrate for a multiyear period that this ... is gonna be effective before moving that into the base budget," Salih said. Staff noted the committee has discussed an informal long‑run target for base‑budget growth near 6 percent.

Members asked detailed follow‑up. Senator Trujillo pressed on administrative limits tied to a new administration: "It's a 6 month rule, half a year. Agencies can only spend half of the budget ... is there anything that we need to be looking at as we're preparing the budget to make sure that large portions of money don't go into those exclusions?" Salih characterized that as an administrative matter but said staff will provide clarity. Vice Chair Munoz asked for the staff calculation of how many employees and how much was needed to bring pay rates to newly adopted minimums; Salih said staff would research and report back, describing an earlier working estimate that $17 million had been appropriated in expectation of raising pay to new minimums but that the full amount likely would not be required.

Transportation funding was raised as an agenda priority by Senator Woods, who urged the committee to consider returning maintenance money to the program: "We are leaving these guys high and dry on their maintenance budgets right now," he said, arguing roads funding should be near the top of the next budget.

Members also discussed tax‑expenditure language in the draft. Salih warned recent federal action could reduce state capacity to change tax policy; Representative Lente pushed back that the committee should retain authority to pursue state tax changes and suggested reworking the draft language.

What’s next: staff said the revenue outlook section will be updated after official revenue estimates and that the committee will receive a more complete briefing before the August meeting. No formal votes on the guidelines were taken; the committee approved several meeting minutes at the start of the session (June full committee minutes moved by Senator Gonzales and seconded by Representative Chatfield; child well‑being minutes moved by Representative Dixon and seconded by Senator Trujillo and Senator Tobiasin; natural resources minutes moved by Representative Vincent and seconded by Senator Woods).