Legislators Press Finance Panel on Bill 44, Tax‑refunds, rainy‑day fund and grant reimbursements

Legislators questioned finance officials late Wednesday about how the proposed FY2026 substitute budget (Bill 44) would handle tax refunds, fund balances and a backlog of grant reimbursements.

In opening exchanges about tax refunds, Marie Flores, Department of Administration grants staff, described the agency's processing sequence: "they file... our team processes the returns. And then for refunds themselves, once we... have a summary... then the summary goes to Director Berne for approval... and then our team processes that, and then it goes back to DOA for signature and mailing." Flores added that a record labeled "status A" generally signals that an item is clear and ready for payment, though staff sometimes review holds when they appear.

Lawmakers pressed officials about whether the government can withhold refunds while litigation proceeds. A panelist responded succinctly: "There's an injunction," which the panel said requires payment under the court order. Officials told the committee the administration has been paying refunds in accordance with that injunction and that, in some cases, paying earlier reduced interest costs the government otherwise would have borne.

Why it matters: Tax refunds, the composition of the rainy‑day fund and the true unassigned fund balance affect how much the Legislature can appropriate to agencies and capital projects in Bill 44. Lawmakers repeatedly asked whether the substitute budget uses conservative or more expansive assumptions about available funds.

On fund balances and the audit: Committee members asked…