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Section A Subcommittee approves multiple internal-service rates, rejects some agency requests
Summary
The subcommittee voted on a slate of internal service rates and related boilerplate language for the coming biennium: several rates were approved by voice vote, one initial workers' compensation proposal failed on roll call and an alternative was approved, and at least one IT rate proposal failed on a tie vote.
The Section A Subcommittee took executive action on a package of internal service rates and related budget language during its Feb. 4 meeting, approving most agency requests with targeted reductions and rejecting or modifying others after member questions.
Chair Debra Falk led the committee through a line-by-line executive action on internal rates and proposed boilerplate language. The committee approved a number of items by voice vote, including the chief data office rate and the statewide cost allocation (SWOTCAP) authorization, print and mail services, warrant writer, SITSD working capital reserve, and several management services items. Chair Falk moved many of the items on the rate sheet; in some cases other members made the motions.
Several votes drew extended discussion. On workers’ compensation management, the committee first voted on a motion to hold the rate at $0.97 for fiscal years 2026 and 2027; that motion failed on a roll-call vote (3 ayes, 5 noes). The committee then approved an alternate motion to adopt a rate of $1.24 for FY 2026 and $1.23 for FY 2027 by voice vote.
A proposal to adopt the PERS Financial Services Technology Bureau rate as requested was closely contested. The roll call produced four ayes and four noes and failed on an even split. Committee members raised concerns about rising software licensing and maintenance costs — including projected increases to Oracle/PeopleSoft maintenance — and about whether increased technology spending would yield net efficiencies.
On training services, the committee approved separating LinkedIn Learning from enterprise learning and adopted both the LinkedIn Learning and enterprise learning-and-development rates; the committee did not ultimately approve a separate Robert’s Rules training rate after members reconsidered the previous omnibus motion and removed Robert’s Rules from the package.
Other items adopted (voice votes unless noted) included the human resources information system fee, risk management and tort-defense allocations (with temporary rate relief noted in the language), facilities management bureau rates (the committee adopted a blended facilities rate of $11.25 per square foot for both fiscal years), and project-management and access-ID card fees tied to facility services.
Why it matters: These internal service rates determine the chargeback amounts agencies include in their budgets for services such as information technology, human resources systems, printing, and facility maintenance. Changes in these rates shift costs among agencies and can affect agency budget requests and the statewide fiscal picture.
Votes at a glance (selected items, text verbatim from motions where recorded):
- Chief Data Office internal rate: "$500,000 for fiscal year 2026 and $500,000 for fiscal year 2027." Motion moved by Chair Falk; voice vote; motion carries.
- Management Services, Human Resources internal rate (chair’s amendment): "$13.05 for fiscal year 2026 and $13.05 for fiscal year 2027." Motion moved by Chair Falk; voice vote; motion adopted.
- Statewide Cost Allocation Plan (SWOTCAP): "$4,500,000 in fiscal year 2026 and $4,500,000 in fiscal year 2027." Motion moved; voice vote; motion carries.
- Workers’ Compensation Management program (first motion): keep rate at $0.97 in FY26 and $0.97 in FY27 — roll-call result: Vice chair Mandeville: yes; Senator Tezek: yes; Representative Walsh: no; Senator Harvey: no; Representative Muscovich: no; Senator Flowers: no (by proxy); Senator Ellsworth: no (reluctant); Chair Falk: yes — tally 3 ayes, 5 noes; motion fails.
- Workers’ Compensation Management program (second motion): adopt $1.24 for FY26 and $1.23 for FY27 — voice vote; motion carries.
- PERS Financial Services Technology Bureau (requested increase): roll call produced 4 ayes and 4 noes; motion fails on a tie.
- LinkedIn Learning and Enterprise Learning & Development rates: LinkedIn Learning adopted at the requested level; Enterprise Learning & Development adopted at the requested level; Robert’s Rules training was removed from the package after reconsideration and was not approved as a separately funded rate.
How the committee decided: Most items were decided by voice vote after brief staff or agency explanations; several items drew extended member questions about pay-plan impacts, fixed-cost drivers and projected licensing increases. Agency staff (including Kristen Reynolds, chief financial officer, Department of Administration; Amy Sassano, deputy budget director; and Cheryl Grama, administrator, State Financial Services Division) answered technical questions about how pay-plan assumptions, software licensing and maintenance, and past vacancies affect small programs’ rates.
What the transcript shows: The committee repeatedly noted that many rates are maximums and agencies may charge less than the approved maximum. Members also asked staff to produce calculations showing the dollar impact of specific rate changes across state agencies; staff agreed to provide that analysis where feasible.
Next steps: The committee will continue executive action on remaining service rates at subsequent meetings; staff will provide requested analyses and members indicated they may hold items for additional caucusing if needed.
