Joint finance panel sets health-insurance funding at $14,130 per FTE; fails to agree on statewide pay plan

The Joint Finance‑Appropriations Committee voted Friday, Jan. 31, to set employer health‑insurance funding at $14,130 per eligible full‑time equivalent (FTE) position for fiscal year 2026, while several competing proposals to change statewide employee compensation failed to win the committee’s approval.

The $14,130 funding level was proposed as a compromise figure and was moved by Senator Woodward and seconded by Representative Tanner. The committee recorded a joint result of 17 ayes, 0 nays and 3 absent/excused (Senate: 8‑0 with 2 absent; House: 9‑0 with 1 absent). The motion carried with a due‑pass recommendation.

Analyst Ira Bybee told the committee staff prepared three dollar‑amount options for the health‑insurance component: a CEC committee recommendation of $13,960 per FTE, the governor’s recommendation of $14,300 per FTE and a midpoint compromise of $14,130 per FTE. Bybee provided projected reserve‑fund ending balances tied to those options: about $51.6 million under the $13,960 option and about $61.4 million under the $14,300 option; the midpoint falls between those figures.

Why it matters

The committee’s choice establishes the per‑employee funding that agencies will use to budget state employer contributions for health coverage in FY2026 and affects projected reserve balances for the state’s pooled health plan. Committee members debated whether to reflect the “actual cost” of insurance in the per‑FTE funding or to use reserve balances to partially buy down premiums for agencies and K‑12 districts.

What committee members said

Representative Furness urged caution about relying on actuarial projections, saying the long‑term consultant Milliman’s forecasts have been consistently conservative. “They have consistently been, too conservative,” Furness said, adding that Milliman’s projections have tended to overstate required reserves.

Senator Ward Engelking argued the committee should reflect actual insurance costs rather than using reserves to mask cost growth. “I think we should be reflecting the actual cost of insurance,” he said.

CEC (change in employee compensation) discussions

The committee spent substantial time on competing CEC packages but did not adopt any of the four comprehensive motions presented. Analyst Bybee outlined four distinct approaches: a dollar‑amount floor paid to all employees (calculated as $1.55 per hour per FTE in one motion), a dollar amount plus a small top‑up to ensure a 3% minimum for higher‑paid staff, a merit‑based up to 4% option, and the governor’s recommendation (roughly a 5% merit distribution). The motions included separate calculations for community colleges, public K‑12 allocations and targeted adjustments (for IT/engineering classifications, troopers and certain healthcare positions).

Representative Miller introduced the motion built around a $1.55 per hour per FTE distribution (one of the motions on the table). Senator Cook offered a merit‑based substitute that would provide up to 4% on a merit basis. Representative Furness later offered a compromise substitute that combined the $1.55 floor with a 3% minimum for higher‑paid employees and included targeted trooper and other adjustments.

Committee members expressed a range of views. Senator Cook framed the choice as one between a flat across‑the‑board increase and performance‑based pay: a flat increase, he warned, “moves toward the notion of a participation trophy.” Representative Handy cautioned there is value to treating employees uniformly to meet inflationary needs, noting that when he asked workers to self‑identify top performers “95% of my guys thought they were in the 10%.” Senator Woodward said he favored a merit element to recognize stronger performers.

Outcome on CEC motions

The committee conducted multiple roll calls on substitute and original CEC motions over the course of the hearing. No CEC motion achieved the joint‑committee majority required under the committee’s voting letter and procedures, and each of the principal CEC proposals failed in at least one roll call. The committee chair said the issue is too complex to resolve “on the fly” and that staff will return with corrected language and numbers; members agreed to reconvene the discussion at a later date.

Procedure note

Committee staff said the joint ballot is programmed to require a majority of the quorum present from both the House delegation and the Senate delegation for a motion to pass; committee leadership provided a letter describing the intended joint voting procedure and cited precedents from prior years.

What’s next

The health‑insurance funding level will carry a due‑pass recommendation out of the committee. The CEC package will be returned to staff for recalculation and rewritten language; the committee announced it will resume consideration at a future meeting and reschedule agencies that were queued for hearings.