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Budget office: state projects roughly $700 million structural surplus; governor proposes $338 million FY2025 ending balance
Summary
Legislative services staff told the Joint Finance-Appropriations Committee the state projects a multi‑year structural gap between revenues and expenditures but still shows a roughly $700 million structural balance in the near term; the governor's FY2025 recommendation would leave a $338 million ending cash balance.
Keith Bybee, division manager for budget policy analysis at the Legislative Services Office, told the Joint Finance‑Appropriations Committee that the state's revenue picture has changed dramatically since 2020 and that current forecasts show a continuing structural gap between recurring revenues and recurring obligations.
"The good news about all of this is the legislature has really managed its finances to put yourself in a position to make changes that are reflective of the policy, the body's policy choices," Bybee said, describing how revenue surged during the COVID years and now rests on a higher baseline than before the pandemic.
Bybee used the committee's standard projections to show recent history and the governor's recommended baseline. He said the state saw general fund revenue rise from about $4.0 billion pre‑2020 to roughly $6.2 billion during 2020–2021 before moving back toward a new baseline. The 2024 actual collections were cited at about $5.7 billion. Using the governor's budget numbers presented to JFAC staff, Bybee said the committee's current projections show roughly a $700 million structural balance in the 2025–2026 window when comparing projected ongoing revenues to projected ongoing expenditures.
Why it matters: lawmakers use the structural balance—ongoing revenues minus ongoing obligations—to decide whether to finance tax relief, ongoing program increases, or one‑time expenditures. Bybee stressed that the state can afford policy choices but that tradeoffs remain: "How to balance that scale ... between tax relief, between ongoing growth and budgets and supporting the state government that your constituents are looking for," he said.
Key figures presented to the committee included: - 2024 actual general fund collections: about $5.7 billion. - Bybee's cited COVID peak in revenue: roughly $6.2 billion. - Projected structural balance in FY2025–FY2026 (per the governor's numbers cited): about $700 million. - Governor's proposed FY2025 ending cash balance (Bybee's summary of the reconciliation): $338 million.
Bybee walked the committee through the cash reconciliation tables found in the legislative budget book and explained common budget terms such as reappropriation, executive carryforward, and deficiency warrants. He emphasized that some previously authorized transfers (for example, transfers to transportation and other funds) were already counted in the cash reconciliation and that the committee must weigh new priorities against those commitments.
During the presentation committee members asked for additional detail about specific transfers and interest earnings on cash balances; Bybee said staff would present more detail later in the week and referred interest questions to the treasurer's office briefing scheduled in the same agenda.
The overview set the stage for the committee's workload: Bybee said program maintenance proposals and enhancement requests will drive the next round of deliberations and that the committee would need to decide which policy priorities to fund from the structural balance.
Ending note: the presentation emphasized that lawmakers have options—tax relief, ongoing spending, or one‑time investments—but tradeoffs will shape the final fiscal package as the committee considers program maintenance, enhancements and transfers.
