Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Budget Process topic
No spam. Unsubscribe anytime.
Staff outlines program maintenance process; sales-tax distributions shrinking share to general fund
Summary
Budget staff outlined a 10-bill program-maintenance approach for setting the state's baseline budgets and showed statutory sales-tax distributions are leaving a smaller share for the general fund, a trend staff warned could constrain appropriations in a downturn.
Keith Bybee, Division Manager of Budget Policy Analysis, briefed the Joint Finance-Appropriations Committee on the program maintenance appropriation bills, the decision units that make up those bills, the upcoming hearing schedule and a related review of sales-tax distributions that affect the general fund.
Why it matters: Program maintenance decisions determine the baseline "ongoing" spending levels the Legislature must either fund, adjust or override before considering new (enhancement) requests. At the same time, statutory sales-tax distributions increasingly divert a larger share of gross sales-tax collections away from the general fund, which reduces the amount available for appropriation.
Program maintenance structure and schedule: Bybee explained staff organized program maintenance into 10 functional appropriation bills (examples: General Government; Judicial Branch; Public Safety; Health & Human Services; Natural Resources; Education and public schools). Maintenance bills cover adjustments between the budget's established benchmarks (personnel benefit cost adjustments, contract inflation, statewide cost allocation, and the change-in-employee-compensation adjustments). Bybee said, "This year, the intent is to include all of the CEC in the program maintenance bills," which is a change from past practice where some CEC items were treated separately.
Enhancements and population-forecast adjustments: Bybee and committee leaders explained that replacement items, annualizations and the category formerly called "non-discretionary" are being treated in enhancement bills rather than the program maintenance bills. The population-forecast adjustments (for example, K-12 support units or Medicaid caseload changes) were reclassified to enhancement bills to give JFAC more discretion and transparency over growth items.
Replacement items and IT: Staff said regular replacement items and IT replacement items will be separated into distinct decision units so JFAC can consider them independently.
Scale example: Bybee presented an illustrative statewide total for program maintenance under the governor's proposal that showed an aggregate figure of about $12.86 billion for program maintenance in fiscal 2026 (presentation figure used as an example of how building-block adjustments accumulate).
Sales tax distribution and the general fund: Bybee walked through the statutory sales-tax distribution mechanics (citing statute reference provided in the presentation) and showed gross sales-tax collections growing from roughly $3.1 billion in 2024 to projected $3.37 billion in 2025 and about $3.5 billion in 2026. After statutory distributions (revenue sharing, earmarks for local units and other funds, transfers to a tax-relief fund established for internet sales tax revenues), the share remaining for the general fund has declined. Bybee's materials showed the general fund's share of sales tax at about 65% in the 2025 projection, down from roughly 85% in the period before the Great Recession, and he cautioned that a smaller general-fund share of sales tax reduces the Legislature's flexibility in a downturn.
Action and next steps: The committee voted by unanimous consent to reorder the meeting agenda earlier so certain maintenance-budget items could be heard before some members left. Bybee said program-maintenance hearings will include a packet walkthrough Wednesday next week and decision-making on the maintenance bills on Friday; enhancement bills will follow.
Speakers: Staff and several members asked clarifying questions about scope, timing and how the decision units map to agency line items; staff committed to circulating corrected tables and supporting materials.
