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Legislative staff present statewide decision packet: revenue forecast choices and competing CEC recommendations
Summary
Legislative Services Office briefed the committee on statewide decisions that will affect FY2026 budgets, including two revenue forecast options and competing change‑in‑employee‑compensation (CEC) recommendations: the governor’s package and the CEC committee’s dollar‑per‑eligible‑employee alternative.
Legislative staff told the Joint Finance-Appropriations Committee that it will need to choose among statewide budget decisions this week, including the FY2026 general‑fund revenue forecast, personnel benefit adjustments, contract inflation, statewide cost allocation changes and competing change‑in‑employee‑compensation (CEC) proposals.
Keith Bybee, Division Manager of Budget Policy Analysis for the Legislative Services Office, walked the committee through the packet and timetable. The committee is scheduled to set statewide decisions Thursday and then set program maintenance budgets later in the week. Bybee outlined two revenue forecast options: the governor’s recommended general fund revenue for FY2026 of $6.26 billion and the Economic Outlook and Revenue Assessment Committee’s (EORAC) recommendation of $6.40 billion for budget‑setting purposes.
CEC and compensation: The packet presents two alternatives. The governor’s recommendation is roughly equivalent to a 5% (or $1.55 per eligible hour) statewide increase with additional specific schedule shifts for IT/engineering and some public‑school support units, totaling roughly $179.7 million statewide as presented. The CEC committee’s recommendation included an across‑the‑board dollar‑per‑eligible‑employee proposal (referenced at $1.55 per eligible employee) and, as presented, would be slightly lower in total cost than the governor’s package. Bybee cautioned that some schedule‑shift numbers were still being finalized and that small adjustments could appear when final reports are delivered to the committee.
Other statewide adjustments: Bybee described a personnel benefit cost adjustment request (notably for health insurance), contract inflation and statewide cost allocation changes, including an increased charge from the state controller’s office linked in part to recent system changes. The statewide cost allocation increase presented in the packet would raise general fund charges by about $3.6 million statewide.
Why it matters: committee members asked for more detail on how CEC choices affect agencies differently and raised concerns about the potential loss of highly skilled employees to private markets if compensation does not keep pace with cost of living. Several members requested additional analyses showing the distributional impact of CEC options across agencies and classifications. Bybee and Division of Financial Management staff said they would provide follow‑up documentation ahead of Thursday’s votes.
What’s next: the committee plans to vote on revenue and the four statewide decision packages Thursday and then move into agency program maintenance budgets the following days. Staff warned members some numbers were still being finalized and that committee members would receive updated documentation before votes.
