Joint finance reviews Department of Administration budget; analysts flag governor housing fund shortfall and need for risk-property staff

Legislative budget staff and Department of Administration leaders briefed the Joint Finance-Appropriations Committee on the department's FY2026 budget request, highlighting a request to restore the governor's housing fund, several personnel requests to handle increased workload in insurance and property valuation, and continuing capital and maintenance work at the Chinden Campus.

The Department of Administration’s budget presentation described the agency as providing central services to state government, including public works, purchasing, group insurance and risk management, document services and centralized fiscal support. Frances Lippett, budget and policy analyst with Legislative Services, told the committee the department’s appropriation is “drawn largely from dedicated funds sourced by payments from agencies for its services,” and that roughly 10 percent of the department’s appropriation comes from the general fund.

Why it matters: the department manages widely used services (insurance, building maintenance, procurement) and several of its funds use continuous appropriation; shortfalls or staffing gaps can affect payments, property insurance and building maintenance across state government.

On the governor’s housing fund, Lippett said the fund provides a monthly housing stipend “currently set at $4,551” and that the fund “has no consistent source of revenue.” She told the committee the legislature did not fund a prior, smaller request and that the department now seeks a general‑fund appropriation to restore the fund balance. The department warned the fund would be depleted by August 2026 without an appropriation.

Steve Bailey, director of the Department of Administration, described the governor’s housing question as unresolved and said the Governor’s Housing Committee has considered whether to pursue a formal governor’s residence but “hasn’t really gained any traction” and has continued the stipend approach. Bailey said there is a parcel of state property set aside for a mansion that currently sits in a revocable easement with the City of Boise.

Risk management and insurance: Faith Knowlton, administrator for the department’s insurance programs, told the committee the division is understaffed for the portfolio it manages. “We have one analyst that is responsible for over $11 billion in property,” Knowlton said. She said agencies sometimes enter inaccurate property values, including instances where demolished buildings remained on the insurance roll, and added the division’s initial appraisal effort removed roughly half a billion dollars in over‑insured property values. Knowlton said the office can only request refunds within the current year but is conducting a four‑year appraisal cycle and requested a new property‑values analyst post so agencies would be required to coordinate property additions and changes with her office.

Chinden Campus and leasing: Dale Reynolds, administrator for the Division of Public Works, told the committee the state has completed about $70 million of work at the Chinden Campus, has about $30 million in projects in progress and estimates another $145–160 million in additional deferred‑maintenance and upgrades if the state completes work on the remaining buildings the state controls. The division reported roughly 7 percent of rentable square footage on the campus is vacant, excluding one completely vacant building (Building 3); Hewlett Packard (HP) continues to occupy three buildings under lease, a footprint that represents about 40 percent of the campus’s rentable square footage and runs through 2029 with an option to extend.

Staffing and workload: Lippett and Bailey described several staffing requests in the FY2026 package: new positions for group insurance customer support, a property‑value analyst in risk management, three positions in public works (including project managers), and purchasing officers for procurement workload. Lippett told the committee the group insurance plan has grown more than 33 percent since FY2021, largely due to participation from school districts that do not integrate on the state payroll system, increasing the volume of transactions requiring support.

One‑time and small capital items: the department requested one‑time funds for equipment tied to new positions, a trailer for security staff on the Capitol Mall ($8,500, after a vehicle was repurposed), replacement vehicles for postal services and public works, and $79,000 of IT hardware recommended by the Office of Information Technology Services. Lippett said the governor recommended the requested enhancements.

What the committee asked: members pressed for additional detail on continuously appropriated funds, the retained risk account, and the composition of direct investments that appear in fund‑balance tables. Representative Tanner asked Lippett for a breakdown of continuous appropriations for the retained risk account; Lippett agreed to provide the committee those details. Senator Bjerke asked for context on negative free‑fund balances in the permanent building fund in 2022–23; Lippett explained those negative free balances were offset by directed investments held by the State Treasurer and therefore netted to positive balances when investments are included.

Bottom line: the department’s FY2026 request focuses on modest operating enhancements, a small general‑fund request to shore up the governor’s housing stipend, and ongoing capital and maintenance work; committee members asked for more detail on continuous appropriations, direct investments, and whether certain positions could be phased if project loads decline.

Ending: Lippett and Director Bailey said they would provide additional fund‑balance detail and historical materials on the governor’s housing committee for the committee’s review.