Legislative budget panel told governor's recommended budget is structurally unbalanced by at least $85 million

Senators and assembly members told the governor's budget team on Monday that the governor's recommended budget for the 2025—27 biennium contained major calculation errors and inappropriate one-time reversions, leaving the state's proposed spending higher than projected revenue.

The majority leader told the Legislative Commissions Budget Subcommittee that "within hours of receiving the budget" legislators found "major structural issues" and that the recommendation "is in fact not balanced," estimating the initial shortfall between $300 million and $400 million. "This document does not meet our ultimate constitutional requirement of passing a balanced budget," the majority leader said.

Why it matters: The Legislature is constitutionally required to adopt a balanced budget. Lawmakers said the errors make it difficult to meaningfully review agency requests and to negotiate policy bills that carry fiscal commitments. Committee members pressed the governor's finance team for detailed, line-by-line amendments and supporting schedules so the Legislature can assess how much of the original shortfall was corrected.

At the hearing, Tiffany Greenmeier, director of the Governor's Finance Office, told the committee staff that revised calculations on so-called 2023 "one-shot" reversion amounts and salary-adjustment reversions reduced the original structural deficit the governor submitted. Greenmeier said an earlier submission included $212 million in projected one-time reversions; after corrections the one-time reversion figure was reduced to about $114.1 million. She said additional corrections and budget amendments brought the overall structural gap down from roughly $335 million in the governor's original submission to about $85 million.

Committee members repeatedly asked the governor's team to supply a full breakdown: which 2023 one-time appropriations were incorrectly counted as available reversions, what specific line items were changed, whether items previously described as "one time" actually carry ongoing administrative costs, and whether collective-bargaining salary estimates for the next biennium were reflected. Greenmeier repeatedly agreed to provide line-item detail and said the governor's office would submit formal budget amendments for the committee to review.

"We were submitted with the governor's recommended budget, which we obviously discussed. We have some very serious concerns about," the majority leader said, adding the committee would ask the Executive Branch to bring proposed corrective amendments by 5 p.m. on Jan. 29.

Budget staff clarified several points at the hearing. Greenmeier said the governor's five priority policy bills contain about $400 million in topline costs and that some parts may be ongoing rather than one-time, which would increase the fiscal pressure. She also said certain previously committed funds (for example, money already obligated for the Campus for Hope) were improperly shown as available reversions and therefore could not legally be swept for unrelated purposes.

Committee members asked for a detailed reconciliation showing each dollar of the prior $212 million in reversions and how the $114.1 million figure was derived. Greenmeier told members she would work with legislative fiscal staff to provide a full breakdown and confirmed the revised structural deficit number of $85 million "after all the revisions that we did." She said further amendments were forthcoming as the governor's office continued to review agency budgets.

Ending: Lawmakers left the hearing pressing for rapid delivery of the underlying schedules and formal budget amendments. Several members emphasized that corrections need to be submitted with enough time for the Legislature to review them before substantive budget decisions are made.