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State benefits account for about one-quarter of personnel costs; governor recommends higher health appropriation per FTE
Summary
Legislative analysts described state employee benefits and the governor's FY2026 recommendation for the health insurance appropriation. The governor recommends $14,300 per full‑time position for health coverage, up from a lower actuarial base, a change staff said would cost about $56.6 million.
Legislative budget analysts walked the committee through the composition of state employee benefits and how benefit costs are budgeted.
Frances Lippitt, budget and policy analyst with the Legislative Services Office, told members that benefits (health, dental, pension, Social Security/Medicare, life insurance and workers' compensation) account for about one‑quarter of the state's overall personnel expenditures. "Health insurance accounts for nearly half of all benefits costs and is budgeted based on an appropriation set per FTP," Lippitt said, using the acronym FTP (full‑time position) used in the budget book.
The presentation included the governor's recommendation for the FY2026 appropriation per FTP: the actuarial target used by the governor is $14,300 per FTP. Lippitt said that using the higher actuarial recommendation (to fund the plan at a level intended to cover 100% of plan costs in 90% of scenarios) would raise the appropriation and cost approximately $56.6 million compared with the lower base. She also summarized pension (PERSI) employer contribution rates used for budgeting: 11.96% for general members, 14.65% for public safety employees and 13.47% for teachers, which together represent a substantial portion of variable benefits.
Why it matters: Employee benefits are a recurring, material portion of departmental personnel budgets; changes to per‑FTP health appropriations or pension rates shift program‑maintenance costs across agencies and affect the amount of general fund dollars required to maintain current services.
Committee members asked a clarification question about why the governor's recommendation used a higher per‑FTP appropriation instead of drawing down plan reserves; the analyst said the administration's approach is more conservative and reduces reliance on reserves, providing more predictability for agencies and budget planning.
