JFAC staff: Governor's FY2026 recommendation leaves roughly $700 million structural balance; transfers, bond closeout and savings highlighted

Keith Bybee, division manager of Budget Policy Analysis for the Legislative Services Office, told the Joint Finance-Appropriations Committee on the morning the governor’s recommended budget projects a continuing structural balance of roughly $700 million for fiscal 2025 and fiscal 2026.

Bybee said the state’s pattern of revenue growth changed during the COVID years, rising from about $4 billion before 2020 to more than $6.2 billion after federal relief and rapid population growth. “Because there’s been such significant population growth, we won’t revert back to that trend line of about 4% growth,” he said, describing a new baseline nearer $5.7 billion in ongoing revenue.

The governor’s recommendation shows roughly $5.9 billion in ongoing general fund revenue for 2026 and projected general fund expenditures of about $6.26 billion, producing the cited structural delta. Bybee said the structural balance gives the legislature “a lot of choices” — including tax relief, program increases, or increased savings.

Why it matters

The committee was shown how that structural balance underlies decisions about one-time transfers versus…