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Legislative staff outline statewide options: revenue forecast, benefits, cost allocations and CEC choices
Summary
Legislative analysts presented the statewide decision packet including two revenue forecasts ($6.26B governor, $6.4B EORAC), personnel benefit cost options for health insurance, a $5.5M statewide cost allocation adjustment, contract inflation, and two change‑in‑employee‑compensation (CEC) packages (governor and CEC committee recommendations).
Legislative staff briefed the Joint Finance Committee work group on statewide budget decisions the committee will vote on later in the week, including competing revenue forecasts, personnel benefit cost adjustments, statewide cost allocation changes, contract inflation and proposed change‑in‑employee‑compensation (CEC) packages.
Keith Bybee, division manager for budget and policy analysis in the Legislative Services Office, outlined two options for FY2026 general fund revenues: the governor’s recommended $6.26 billion and the Economic Outlook and Revenue Assessment Committee’s recommendation of $6.4 billion for budget‑setting purposes.
Bybee summarized statewide decision units that the committee will set soon: a personnel benefits adjustment driven by health insurance changes (the governor’s package would fund a larger increase than the CEC committee’s recommendation), contract inflation at $3.3 million (all funds), and a statewide cost allocation increase of $5.5 million (of which about $3.6 million is general fund). He described the governor’s proposed CEC package — a roughly 5% merit equivalent plus schedule shifts and school support — totaling about $179.7 million statewide, and the CEC committee recommendation, which is slightly lower in aggregate at about $174.7 million.
Bybee cautioned that some salary schedule numbers were still being reconciled and that agency‑level impacts can vary widely: a uniform statewide dollar increase can translate to different percentage impacts across agencies depending on their workforce composition.
Legislators pressed staff on details. Senator Cook asked why the state controller billing increased substantially; staff attributed part of the change to a prior calculation error and to adjustments tied to the state’s HCM/LUMA payroll implementation. Senator Ward Engelking expressed concern that a flat dollar‑per‑employee approach (the CEC committee recommended $1.55 per hour equivalent in some communications) may not keep pace with cost‑of‑living increases for specialized, highly paid staff and asked staff to prepare alternatives.
Division of Financial Management administrator Laurie Wolf discussed health insurance reserve calculations and said actuarial updates drive the recommended funding level; she warned that underfunding health insurance contributions could create larger per‑employee jumps in future years and put reserves at risk.
Bybee asked the committee to be prepared to set statewide decisions on Thursday and agency program maintenance budgets the following week; staff said they will circulate updated numbers if reconciliations change the statewide totals.
