Appropriations committee reviews governor's FY2026 budget language, flags transfers, reserves and cannabis fund changes

Good afternoon. This is the House Appropriations Committee. It is Thursday, 02/06/2025 at 1PM. The committee continued its review of the governor's recommended FY2026 budget language, focusing on statutory fund transfers, reserve changes, and one-year fixes for the cannabis regulation fund and other accounts.

The committee heard detailed explanations from Hardy Merrill, deputy commissioner at the Department of Finance and Management, and staff including Adam Greshen about a range of transfers the administration proposes in the FY2026 language. Merrill described routine items such as transfers from the Transportation Fund and the Education Fund, and told the committee "these are both annual transfers" when explaining transfers that move money from one fund to another.

Why it matters: the language under review would (a) shift several recurring transfers that underpin internal programs and debt service; (b) temporarily reallocate certain cannabis excise proceeds and create a new substance misuse special fund for prevention programs; and (c) unreserve sizable amounts from stabilization and caseload reserves and direct funds toward education transformation and pension commitments. Those moves affect how much is available to the general fund, to agency operations, and to statutory reserves the state uses for fiscal stress.

Major items discussed

Cannabis regulation fund and substance misuse special fund: Committee staff described a one-year maneuver for FY2026 that allows excise-tax receipts that this year flowed into the Cannabis Regulation Fund to be split 70/30 after a closeout: 70% to the General Fund and 30% to a newly established Substance Misuse Prevention Special Fund. The administration said the change is intended to leave the Cannabis Control Board with sufficient carry-forward to operate in FY2026 while directing the excise-tax proceeds to the general fund and a dedicated prevention fund in the short…