JFAC adopts FY2025 revenue projection; several statewide budget items pass while health insurance and pay decisions are deferred

The Joint Finance-Appropriations Committee (JFAC) voted Friday to set a revenue number for fiscal year 2025 but did not reach agreement on the FY2026 revenue forecast or on proposals to change state employee health insurance base funding and broad compensation adjustments.

On a voice roll call, Senator Woodward moved that JFAC adopt the Economic Outlook and Revenue Assessment Committee’s (EORC) recommended general fund revenue projection for fiscal year 2025. The motion passed with a recorded total of 20 yeas, 0 nays; the chair read identical majorities from the Senate and the House and declared the motion carried.

The committee could not agree on a fiscal 2026 revenue projection. Representative Petsky initially moved to adopt the EORC recommendation for FY2026; Representative Petsky and others later corrected wording in the motion during debate. Senator Woodward offered a substitute motion to adopt a lower general fund projection of $6,330,000,000. The substitute motion failed (grand total 8 yeas, 12 nays). The committee then voted on the original motion; although the original motion received more affirmative votes overall, it did not achieve a majority in both chambers and therefore failed to pass. Committee leadership said voting on the 2026 revenue number would be postponed to a later time.

Several statewide maintenance items were approved. The committee approved the governor’s request for contract inflation adjustments (ongoing increases tied to contract or lease rates) totaling $3,356,400 across funds; that motion passed, with the chair announcing a majority in both the Senate and House. The committee also adopted statewide cost allocation adjustments (changes to interagency billings for central services) resulting in a net total increase of $5,540,500 across funds; that motion also passed with unanimous recorded support from both chambers.

Two competing motions on health insurance base funding — one aligning with the governor’s FY2026 recommendation raising the per-eligible-FTE base to $14,300 and one matching the CEC committee recommendation of $13,960 — both failed to carry with the required majority from both chambers. Analysts told the committee that the amounts are meant to preserve the plan’s statutory 10% contingency reserve; Milliman actuarial projections cited during the meeting estimated the reserve would fall to about $61,400,000 under the governor’s recommendation and to about $51,600,000 under the CEC recommendation from a current balance of roughly $80,491,337. Office of Group Insurance officials warned the committee that falling below the 10% contingency could trigger a risk charge tied to the carrier contract.

A lengthy debate over a broad change in employee compensation — including a proposal for a $1.55 per hour increase for permanent state employees, market adjustments for IT and engineering classifications, and targeted adjustments for Idaho State Police troopers and health-care workers — ended with competing motions withdrawn by unanimous consent to allow staff time to reformat and present the proposals in full at a later meeting. Committee co-chairs said maintenance budget work would continue the next day and the compensation decisions would be taken up later with more time for staff review.

Key agency and staff witnesses during the meeting included Keith Bybee, Division Manager, Budget Policy Analysis Division (presentation of statewide decision packet); Laurie Wolf, Administrator, Division of Financial Management; and Faith Knowlton, Administrator, Office of Group Insurance.