Joint Budget Committee backs 2.5% across‑the‑board pay, approves 1.5% salary‑base reduction and 88/12 health premium split

DENVER — The Joint Budget Committee on March 11 approved core elements of the governor’s compensation package for fiscal 2025–26, including a 2.5% across‑the‑board salary increase and preservation of the negotiated step plan while also adopting a 1.5% reduction to the personnel salary base intended to capture vacancy savings.

The committee voted unanimously to adopt the staff recommendation for a 2.5% across‑the‑board increase and the 0.6% step‑plan adjustment that together form the administration’s broad salary survey proposal. Those actions were paired with a separate unanimous vote to apply a 1.5% reduction to the base salary line — a calculation staff said is intended to reflect anticipated vacancy savings rather than direct cuts to individual pay.

Why it matters: The combination of base building (the 2.5% and the step increase) and the one‑time base reduction changes the pace at which the state’s total pay bill grows. The 1.5% base reduction lowers the starting point used to calculate future base‑building increases and, according to staff calculations, is expected to reduce general‑fund costs by millions in 2025–26 while still allowing pay increases this year.

Key details - Staff recommendation: 2.5% across‑the‑board increase plus 0.6% for step‑plan movement; committee approved both 6‑0. - Base reduction: The committee approved a 1.5% reduction applied to the base salary continuation amount; the motion passed 6‑0. Staff and the governor’s office explained the reduction is being implemented largely through vacancy savings and program exclusions (24/7 facilities, program lines with fewer than 20 FTE, and enterprise funds). - Health, life and dental: The committee shifted the employer/employee premium split from 100% state absorption of premium increases to an 88/12 split; the motion passed 6‑0. Staff said the change was negotiated between the governor’s office and executive branch stakeholders and would apply to the executive branch premium treatment.

What staff said: "My understanding is there was no base reduction contemplated in the original agreement," said Director Harper, describing how the 1.5% was negotiated to be captured through vacancy savings rather than by reducing individual salaries. He added that the agreement between the governor’s office and other parties limits reopening the broader compensation negotiations if implemented through vacancy savings.

What some committee members said: Representative Taggart said he would withhold support for parts of the package until the revenue forecast and further cuts are known. Senator Kirkmeyer pressed staff on long‑term effects of resetting the base and asked whether the change would be annualized back into future salary calculations.

Budget effect and next steps: Staff estimated the base reduction will lower 2025–26 general‑fund obligations for total compensation by several million dollars while preserving the pay increases negotiated for employees. The committee directed staff to finalize department allocations and exclusions (24/7, <20 FTE program lines, enterprise funds) and to continue working with judicial branch counterparts to harmonize calculations for agencies outside the executive branch.

Ending note: Committee members said the package reflects a compromise between preserving salary increases and finding one‑time savings to fit the state’s tighter revenue outlook; staff will reflect the decisions in the figure‑setting documents and departmental line‑item detail.