Joint Fiscal Office briefs Senate on federal funds, spending authority and carry‑forward rules

JOINT FISCAL OFFICE EXPLAINS FEDERAL FUNDING MIX AND SPENDING TERMS On Feb. 7, Emily Burton of the Joint Fiscal Office presented an overview of federal funds flowing through the state budget and a plain‑language guide to appropriations mechanics for the Senate Appropriations Committee.

Why it matters Federal funds make up a substantial portion of the state’s budget and often carry statutory conditions, matching requirements and maintenance‑of‑effort obligations. Committee members said understanding how federal funds differ from state general fund dollars is necessary to assess risks and timing for FY26 decisions.

Key points from the briefing Burton said the portion of the state budget funded by the federal government is roughly 36%, with 64% state‑funded. She told the committee this percentage applies only to dollars that flow through state agencies and are appropriated by the General Assembly; it does not capture federal funds that go directly to municipalities, nonprofit subrecipients or higher‑education institutions.

Burton highlighted program‑level federal reliance: Medicaid (global commitment) accounts for roughly 60% federal funding in that program area, the transportation program is more than 50% federally funded, and unemployment insurance funding in the Department of Labor is more than 63% federal. She also described how federal grants often impose matching requirements and maintenance‑of‑effort obligations and that each federal grant must be approved and accepted by the Joint Fiscal Committee or the General Assembly as required by statute.

Appropriation, obligation and expense Burton defined spending authority (appropriation) as the legislature’s legal authorization to spend a specified amount from a named fund. She distinguished that from obligation (entering a contract or otherwise committing funds) and expense (when payment is actually made).

Carry forward and reversion Burton explained that unobligated spending authority at fiscal year end may be carried forward or reverted depending on the fund and statutory language. Some special funds and capital appropriations carry forward automatically or by statutory provision; general fund carry forward is subject to approval by the secretary of administration in the budget adjustment process. Reversion returns unobligated funds to their originating fund for re‑appropriation.

Rescission and federal uncertainty Committee members asked how the state would respond if federal funds the state was relying on were withheld or delayed. Burton said a rescission is a procedure used to pull back planned spending authority if receipts or reimbursements are not available, and that obligations already entered into present a more complex legal situation that may require negotiation and, in some cases, litigation or federal reconciliation.

Where to find the documents Burton pointed the committee to the Joint Fiscal Office website as the primary repository for federal‑funding summaries and the FY25 budget adjustment materials (including the budget adjustment summary spreadsheet and the web report that annotates changes between the governor’s proposal and the house action). She said the budget adjustment summary spreadsheet is a primary tool staff use to track changes and confirm that the bottom line remains balanced.

Committee follow up Committee members asked a number of clarifying questions during the presentation about examples, timing, and how carry forward and reversion have been applied in recent budget cycles. Members said they will use the JFO materials and the budget adjustment spreadsheet as they review FY25 and FY26 funding adjustments.