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State budget shifts costs to local governments and uses one‑time transfers to balance FY27

Ways and Means Committee · January 6, 2026
AI-Generated Content: All content on this page was generated by AI to highlight key points from the meeting. For complete details and context, we recommend watching the full video. so we can fix them.

Summary

Legislative Services briefed the committee that the governor’s FY27 plan shifts roughly $39 million of retirement cost growth to localities, freezes some aid programs (notably disparity grants), and uses transfers from reserve accounts and the fiscal responsibility fund to balance the year.

The Department of Legislative Services told the Ways and Means Committee that the governor’s FY27 budget relies heavily on transfers and cost shifts that affect counties and local school systems.

“Local governments cover 50% of the increase in retirement costs that the state would normally cover,” David Romans said, describing a $39 million cost shift to localities for K‑12 teacher and community college retirement growth. Romans said this is in addition to roughly $100 million of similar cost shifts enacted…

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