Human Resources requests 5% budget increase for FY27, cites pay and benefit costs
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Summary
Human Resources Commissioner Beth Bastigy told the Senate Appropriations Committee that the department is seeking a 5% budget increase for fiscal 2027, saying roughly 80% of the request reflects higher salary and benefit expenses and that key projects are funded with one‑time appropriations.
Human Resources Commissioner Beth Bastigy told the Senate Appropriations Committee on Jan. 27 that the Department of Human Resources is proposing a 5% increase in its budget request for fiscal year 2027, driven largely by rising salary and benefit costs.
Bastigy said “we're proposing, 5% budget increase for the fiscal year '27, and 80% of that is due to the increased salary and benefits cost,” and asked the committee to refer to the department's budget book for details. The department reported it is primarily supported by internal service funds, with portions coming from the general fund and a special fund; Bastigy identified the general fund share at about 10% and noted a special fund component as well.
Why it matters: The requested increase affects operating budgets across agencies that purchase HR services because HR recovers costs through internal service charges. Bastigy told senators the additional cost pressure will be reflected in agency budgets because employee benefits and salary increases are distributed across those internal charges.
Details and context: Bastigy said HR employs approximately 70 exempt staff and 105 classified positions. The department also continues a classification-and-compensation modernization project, funded with prior one‑time appropriations; vendor work began July 1 and the current phase focuses on job architecture and job‑family design rather than immediate compensation changes. Bastigy said any vendor recommendations that would alter compensation levels could trigger a separate funding request and bargaining with labor partners, but HR is not seeking additional compensation funding at this time.
The committee and HR staff discussed internal transfers and limited‑term positions tied to the Workday enterprise resource planning (ERP) implementation. Bastigy explained that two limited‑service positions supporting the ERP project are funded through project appropriations managed by AOA rather than through HR’s base operating fund.
Next steps: Committee members asked clarifying questions during the hearing; the transcript records discussion and follow‑up but no formal motion or vote on the HR appropriation in this session. The department said it will continue to engage the vendor and bargaining partners if and when compensation changes are proposed.