Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the State Budget Process topic
No spam. Unsubscribe anytime.
Committee reviews statewide budget choices: two revenue baselines, benefit adjustments and CEC options
Summary
Legislative staff outlined major statewide decision points for FY2026 including two alternative general fund revenue baselines, personnel benefit cost adjustments, contract inflation, statewide cost allocation changes, and competing change-in-employee-compensation (CEC) packages.
Keith Bybee, division manager for Budget Policy Analysis at the Legislative Services Office, and other LSO staff reviewed the packet of statewide decisions that the Joint Finance-Appropriations Committee will consider during the FY2026 budget process.
Two revenue baselines: Bybee presented two options for the FY2026 general fund revenue forecast. The first option follows the governor's baseline revenue figure and the second follows the Economic Outlook and Revenue Assessment Committee's recommendation; the packet lists the governor's figure at $6,260,000,000 and the EORAC figure at $6,400,000,000. Bybee noted the revenue choice will underlie appropriation decisions the committee must make.
Personnel benefit costs: The packet includes a proposed personnel benefit cost adjustment that primarily reflects health insurance funding increases for eligible positions. Bybee described a governor-recommended adjustment to health insurance funding and a separate CEC Committee option to fund health insurance increases at a lower rate; he instructed the committee that the health-insurance numbers are confident but other salary-schedule adjustments remained subject to small revisions before formal votes.
Contract inflation and statewide cost allocation: The packet contains a single contract-inflation item (about $3.3 million all funds) and a statewide cost allocation change that increases statewide costs by about $5.5 million (roughly $3.6 million general fund). Bybee noted much of the cost allocation increase this year falls to the Office of the State Controller and the Office of Information Technology Services.
Change in employee compensation (CEC) options: The governor recommended a compensation package described in the packet as a 5% (or equivalent $1.55-per-hour) merit for eligible permanent employees plus schedule shifts and a 5% equivalent for public schools. Bybee said that package totaled approximately $179.7 million statewide in the governor's recommendation. The CEC committee proposed an alternative of a $1.55-per-eligible-employee increase (reported as slightly lower in aggregate) and submitted that recommendation to the finance committee. Bybee cautioned the committee that some salary-schedule numbers were being finalized and that final figures could shift slightly before Thursday's scheduled votes.
Why it matters: These statewide decisions set baseline amounts that drive all agency program budgets. Several legislators asked for additional detail on the distributional impacts of the CEC options and the actuarial and reserve implications of different health-insurance funding choices.
Follow-up: Legislators asked staff to provide additional detail on how a fixed per-hour or per-employee payment would affect agencies differently and requested actuarial backup on group insurance reserves. Bybee and DFM staff said they would provide memos and updated numbers ahead of the committee's scheduled votes.
