Joint finance reviews Department of Administration budget; governor's housing fund flagged as at risk

BOISE, Idaho — Lawmakers on the Joint Finance‑Appropriations Committee on Monday reviewed the Department of Administration's fiscal 2026 budget and heard staff warn that the governor's housing fund will be exhausted if the Legislature does not act.

For the record, Frances Lippett, budget and policy analyst with Legislative Services, told the committee the governor's housing committee recommends an ongoing appropriation to restore the fund and that "without an appropriation, the fund will be fully depleted by August 2026." The committee has recommended previous, smaller appropriations but did not fund them last year, Lippett said.

Why it matters: the governor's housing committee and the fund are authorized by law and used to support a housing stipend or to acquire and maintain a governor's residence. Committee members pressed department staff about the long history of decisions on a formal mansion site and whether the funding request might be more appropriately placed in the executive office's budget.

Director Steve Bailey, who leads the Department of Administration, told the committee the governor's housing committee meets about once a year and that discussion of a formal mansion has resumed at a conceptual level but has not gained momentum. Bailey described a parcel on Horizon Avenue that is currently held in a revocable easement with the City of Boise.

The department's budget overview: Lippett explained the department houses five budgeted programs including the division of public works, purchasing, document services and the office that manages state employee health and benefits. The department is funded mostly from dedicated funds assessed to agencies for services; about 10% comes from the general fund, she said. Over the last three years the department's dedicated fund balances and direct investments have varied widely as the state directed surplus general fund revenues to capital needs.

Insurance, risk management and property valuation: Faith Knowlton, administrator for the department's risk and insurance programs, told the committee the division currently has one analyst responsible for an $11 billion property portfolio and roughly 8,500 vehicles. Knowlton described agency self‑reporting of property values as a chronic source of error: agencies have entered outdated or inflated replacement values, and the division's recent appraisals led to the removal of roughly $0.5 billion in over‑insured property values, saving the state in the low six figures in premium costs in the most recent year.

Knowlton and legislators discussed a four‑year appraisal plan the division has begun; she said new staffing authority would require agencies to route property additions and valuation changes through the insurance office, which the division says would reduce misreporting and limit overpayments going forward.

Chinden Campus and facilities workload: Bailey said work at the Chinden Campus has included about $70 million in completed projects and roughly $30 million in work in progress. He estimated future maintenance and deferred‑maintenance needs could total roughly $145 million to $160 million depending on how many additional buildings the state takes possession of. Bailey said the campus is effectively fully occupied by state agencies with about 7% of rentable square feet vacant (primarily a small portion of Building 4) and that one building (Building 3) remains vacant while the department seeks tenants.

Staffing and procurement: the department requested several ongoing position allocations in fiscal 2026, including positions in the office of group insurance and additional purchasing officers. Lippett said the department has averaged filling 92% of its authorized positions and the Division of Public Works accounts for roughly three‑quarters of department expenditures. Members pressed about turnover and whether recent hires added transient capacity for multi‑year projects; Bailey said turnover has been high and that many project manager positions remain in recruitment.

What the committee asked for next: lawmakers asked for supplemental information, including a breakout of continuous appropriation lines and direct investments that appear on the fund tables, and for historical background on the governor's housing committee and the statute authorizing the fund.

Lippett also agreed to provide the committee a list of the continuous appropriation categories that affect the retained risk and group insurance accounting so legislators can more easily track cash and reserve levels.

The committee did not take any formal votes during the Department of Administration review.

Looking ahead: questions from the committee show two issues likely to reappear in negotiations — whether the governor's housing stipend should be funded from the governor's office or Administration; and whether additional staff for the division of insurance should be funded to reduce ongoing over‑insurance and payment errors.