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Joint Finance staff outline statewide decisions: revenue forecast, CEC options, benefits and cost allocations
Summary
Division manager Keith Bybee and Legislative Services staff briefed the committee on the packet of statewide decisions scheduled for committee votes later in the week: general fund revenue forecasts, personnel benefit cost adjustments, contract inflation, statewide cost allocation and change in employee compensation (CEC).
Keith Bybee, Division Manager of Budget Policy Analysis for the Legislative Services Office, and other LSO staff presented the committee with the statewide decision packet that the committee will vote on later in the week. Bybee said the packet contains choices the committee must set: the FY2026 general fund revenue forecast, personnel benefit cost adjustments (health insurance and related variable benefits), contract inflation, statewide cost allocation rates and change in employee compensation (CEC) options.
Bybee said the committee has two revenue forecast options in the packet: the governor’s recommendation and the Economic Outlook and Revenue Assessment Committee’s recommendation ($6.26 billion vs. $6.40 billion for FY2026 in the materials). He described two options for personnel benefit cost adjustments (one reflecting the governor’s health‑insurance assumptions and a CEC committee recommendation with lower funding) and warned that health insurance figures were final and that some salary‑schedule shifts were still being reconciled in the database.
On CEC, Bybee explained the governor’s package includes a 5% or equivalent dollar‑per‑hour increase (described as $1.55 per hour equivalent in one option) and schedule adjustments for IT and engineering pay; the governor’s package totals roughly $179.7 million statewide. He said the CEC committee’s recommended alternative is slightly lower at about $174.7 million statewide but cautioned that some salary schedule adjustments were still being finalized.
Bybee walked through supporting documentation in the packet (contract inflation, statewide cost allocation detail by agency, and custom reports showing agency and fund impacts). Committee members asked for more detail on specific components—Senator Cook asked why the State Controller’s swipe fee increased markedly (Bybee said there had been a catch‑up after a prior calculation error and noted LUMA/HCM payroll adjustments), and Senator Ward Engelking pressed for stronger targeted increases for highly skilled, high‑paid employees who risk being lost to private sector employers. Bybee and Division of Financial Management staff agreed to supply additional detail and written follow‑up before the committee votes later in the week.
