JFAC hears FY2025–26 budget overview showing about $700 million structural balance, transfers and one-time uses highlighted

The Joint Finance-Appropriations Committee on Friday received an overview of the governor—s FY2025 and FY2026 budget from Keith Bybee, division manager of budget policy analysis for the Legislative Services Office.

Bybee said the current revenue forecast produces a structural balance of almost $700,000,000 in 2025 and that the governor—s recommendations keep a similar delta into 2026. "For fiscal 2025, you're seeing a structural balance of almost $700,000,000 with the current revenue forecast," Bybee said.

The presentation framed the state—s revenue picture as still elevated above pre-2020 trends, driven in part by pandemic-era federal funds and sustained population growth. Bybee said the State General Fund grew from about $4.0 billion before 2020 to roughly $5.7 billion in 2024 actual collections and that governor—s baseline projections show continuing growth rather than a reversion to earlier trends.

Why it matters: That sustained revenue base gives the legislature more room to choose among competing priorities — tax relief, increased ongoing services, or one-time investments — but also raises choices about how much of the extra cash to spend now versus hold in reserves.

Key numbers and planned transfers: Using figures pulled from the legislative budget book, Bybee summarized the governor—s baseline as roughly $5.9 billion of recurring revenue for FY2026 and total cash available about $6.36 billion after other adjustments. The governor—s proposals include transfers and spending of about $477.3 million to other funds (a mix of programs and savings), including $60 million proposed for a fire suppression deficiency warrant and $50 million for a public education stabilization transfer. Bybee also said roughly $160 million of one-time cash would be used in the governor—s FY2026 proposal.

Carryforward, reappropriation and encumbrances: Bybee explained how year-to-year obligations affect available cash. He said executive carryforward and legislative reappropriations account for money already obligated but not yet spent — roughly $44.4 million in executive carryforward and about $16 million of general fund reappropriations in FY2024 that were carried forward in the FY2025 reconciliation.

Bond levy equalization and House Bill 521: The committee asked about the wind-down of the previous bond levy equalization program. Bybee said House Bill 521 deleted the older bond-levy-equalization program from statute and that a remaining fund balance of about $62.8 million will be transferred back to the general fund as that closed program is reconciled. He described the program as a prior state-level offset to local school bond costs that has been replaced by the new bonding approach under H.B. 521 and said the details about how the new bonding will be repaid remain a timing and administrative matter tied to that new statutory framework.

Program maintenance and enhancements: Bybee showed the governor—s program maintenance baseline at about $5.4 billion (a roughly 3.4% increase over FY2025 original appropriations) and governor-recommended enhancements of about $242 million (4.6% year-over-year on the enhancement side). He highlighted specific large drivers the committee will address, including a $34.7 million request tied to the State Public Defender, proposed school funding adjustments and a $100 million earmark for tax relief in the governor—s illustrative plan.

Ending balances: Using the reconciliation table in the budget book, Bybee calculated a projected FY2025 ending cash balance of about $338 million under the governor—s recommendations and an FY2026 projected ending balance of about $227 million, after the governor—s proposed maintenance, enhancements and transfers.

Committee questions and next steps: Committee members asked for follow-up details on the historical use of the governor—s emergency fund, timing of transfers and clarifications on the bond levy closeout. Bybee and staff said they would provide follow-up documentation. The committee was also reminded that the governor—s numbers are recommendations; the legislature and JFAC have statutory authority to set appropriations and to consider legislative initiatives and amendments during the session.

Ending: JFAC staff told members the next steps will be program maintenance hearings beginning with Health and Welfare and that members should expect detailed agency presentations and follow-up materials in the SharePoint packet for the committee.