House committee proposes $16.27 billion budget; health, federal funds remain largest shares

The House Ways and Means Committee on a multi‑hour review presented a budget proposal totaling $16,267,016,000, with health and human services and education taking the largest shares and federal funds accounting for roughly one‑third of total revenue.

Committee discussion began with a high‑level overview of revenue and spending. The committee chair said this was “the first year without the interest in dividends tax,” noting late payments had produced a small residual amount this year. The chair and other presenters emphasized that the general fund is only a portion of total state finances but is the most directly affected by tax policy and discretionary choices.

Why it matters: the proposal frames near‑term spending choices for the next two fiscal years and identifies where lawmakers expect pressure. Health and human services is the single largest category in the general fund and in total funds; education is the next largest general‑fund category. Federal grants and reimbursements remain a substantial revenue source and the committee repeatedly flagged the state’s exposure if federal policy or one‑time federal payments change.

Key facts from the committee presentation: - Total budget proposed: $16,267,016,000 (the governor’s starting proposal had been about $16.7 billion). - Health and human services represented the largest slice of the general fund (about 55% in one general‑fund chart and roughly 43% of total funds in a broader chart presented). - Federal funds were described repeatedly as roughly 30–32% of total budget receipts and are “one of the biggest parts of the budget.” - The general fund constituted roughly 24% of total revenue in the charts presented; the Education Trust Fund and other dedicated funds account for much of the rest.

Committee members pressed presenters for details about revenue assumptions, including the effect of eliminating the interest‑and‑dividends tax. The chair explained that, had that tax remained, revenue would have been substantially higher (committee discussion noted a hypothetical around $200 million instead of the roughly $8.7 million of late payments recorded). Members also discussed long‑running revenue pressures — e.g., vehicle registration fees that have not been raised in decades and gasoline‑tax receipts affected by increased vehicle fuel efficiency and electric vehicles.

The presentation included a discussion of the rainy day fund and a multi‑year surplus statement showing a planned draw and partial rebuild of reserves. Committee leaders said restoring a prudential reserve level was a priority to preserve the state’s fiscal stability and credit standing.

Looking ahead: the Ways and Means budget package will be negotiated further as the full Legislature and then the Senate review the proposals. Committee members repeatedly called out specific line items for further review and signaled a willingness to revisit certain rate and fee design choices depending on feedback and updated revenue estimates.