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Legislative staff outline statewide budget decisions, CEC options and timeline ahead of votes
Summary
Legislative Services Office staff briefed the committee on a package of statewide budget decisions including two revenue forecast options, health-insurance cost adjustments, contract inflation, statewide cost allocation and competing change-in-employee-compensation (CEC) recommendations.
Keith Bybee and other analysts from the Legislative Services Office presented the packet of statewide budget decisions the committee will consider, including choices for the FY2026 general-fund revenue forecast, personnel benefit cost adjustments, contract inflation, statewide cost allocation, and change in employee compensation (CEC).
Bybee outlined two revenue options: the governor's recommendation and the Economic Outlook and Revenue Assessment Committee recommendation. He summarized the governor's and the CEC committee's different approaches to CEC and cautioned about a small remaining data-transcription caveat in salary-schedule shift numbers.
Bybee said the governor's recommended CEC included a 5% (or $1.55 per hour equivalent) merit pool and schedule shifts (3.2% average for regular schedules and 4.5% for IT/engineering), yielding a statewide CEC estimate of about $179.7 million. The CEC committee's recommendation was slightly lower (about $174.7 million) but staff said final numbers may change marginally as salary-schedule shifts are finalized.
Deputy administrators discussed the personnel-benefit-cost adjustment for health insurance. Division of Financial Management Administrator Laurie Wolf described the actuarial process for setting health-insurance funding and warned that funding at the lower actuarial percentile would risk reserves and cause larger catch-up increases in later years. "If we go low to the $13.09 ... in order for us to catch up next year, we would be looking at about a $2,000 jump per employee," she said.
Lawmakers pressed for more agency-level detail and equity across agencies. Senator Ward Engelking urged additional analysis to ensure higher-skilled, higher-paid employees do not lose ground, saying a flat $1.55-per-hour approach may leave some specialists without cost-of-living increases. Several members asked staff for agency-level CEC impacts and for a breakdown of statewide-cost-allocation changes.
Bybee noted the committee will vote on statewide decisions on Thursday and then set program maintenance budgets Friday; he warned of a tight schedule and promised follow-up memos and updated numbers as staff finish database entries.
