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Joint Finance staff outline statewide revenue and compensation choices for upcoming votes
Summary
Legislative analysts presented options for the General Fund revenue forecast, personnel benefit costs, contract inflation, statewide cost allocation and employee compensation (CEC). The committee will vote on those statewide decisions later in the week.
Legislative Services Office staff briefed the Joint Finance‑Appropriations Committee on five statewide decision items that will shape FY2026 budgets: the general fund revenue forecast, personnel benefit cost adjustments, contract inflation, statewide cost allocation and change in employee compensation (CEC).
Keith Bybee, Division Manager for Budget Policy Analysis at the Legislative Services Office, and other analysts walked members through two revenue options (the governor’s recommended forecast and the Economic Outlook and Revenue Assessment Committee’s number) and alternative recommendations for employee benefits and compensation. The committee was told it would take votes later in the week to lock in those statewide parameters.
Bybee summarized the choices: the governor’s FY2026 general fund forecast at about $6.26 billion and the Economic Outlook and Revenue Assessment Committee’s recommendation at $6.4 billion. Personnel benefit costs included two alternative health insurance funding amounts the committee could accept; the governor proposed an increase that would cost about $56.3 million statewide, while a CEC committee figure would fund a smaller increase at about $40.7 million.
A major focus of committee discussion was change in employee compensation. The governor recommended an across‑the‑board equivalent of a 5% or $1.55 per hour merit adjustment for eligible permanent employees, plus targeted schedule shifts for certain classifications; the Compensation, Evaluation and Classification committee offered a different package that would cost modestly less overall. Several lawmakers urged the committee to consider targeted increases for highly skilled state employees, noting the dollar‑per‑hour option can have disparate agency impacts.
Bybee cautioned that some salary‑schedule numbers were still being finalized and that staff would provide updated numerical detail before the committee’s votes. Committee members asked for additional analyses showing the differentiated impacts across agencies and requested more background on reserve and actuarial assumptions for benefits funding. The committee plans final votes on statewide decisions on Thursday and will begin setting program maintenance budgets afterward.
