Committee hears governor's GovRec inputs: one-time buydowns and a proposed shift of purchase-and-use revenue
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Summary
Julia Ritter explained the governor's budget would use one-time general fund transfers (including ~$105 million to buy down property taxes and ~$10 million to backfill an ongoing purchase-and-use revenue shift), and that moving ongoing purchase-and-use tax revenue out of the Education Fund would require higher property-tax revenue all else equal.
At the Jan. 27 Ways & Means Committee meeting, Julia Ritter presented the Education Fund outlook that incorporates the governor's recommended budget (GovRec) and an emergency-board update. Ritter said GovRec proposes two distinct one-time general fund transfers and an ongoing change to how purchase-and-use tax revenue is treated.
Ritter described the proposal as including roughly $105,000,000 in one-time general fund to buy down property taxes and an additional one-time $10,000,000 general-fund backfill to offset a proposed ongoing reduction of purchase-and-use tax revenue to the Education Fund in fiscal 2027. "Line 8 is the $105,000,000...being proposed to lower property taxes. Line 9 is distinct...this is one-time general fund money that is not being used to lower property taxes, but instead is being used to backfill the purchase and use revenue," she said.
Ritter explained the fiscal mechanics: the Education Fund is self-leveling, so decreasing non-property revenue sources (for example, redirecting purchase-and-use tax revenue away from the Education Fund) increases the amount that must be covered by property taxes, holding other inputs constant. She noted the administration proposes one-time general fund money in FY27 to mask an ongoing transfer and that, because one-time and ongoing monies have different fiscal characteristics, the treatment across years differs.
Ritter further described a technical correction in the Budget Adjustment Act (BAA) tied to a prior $13,000,000 tax-rate-offset reserve that had already been used and is now being unreserved as a bookkeeping correction. Committee members asked for clarification about specific reserve lines (including references to roughly $74.9 million and an additional $30 million discussed in caucus); Ritter deferred detailed sourcing to JFO and the governor's budget team when the matter requires line-item authority.
Committee members raised concerns about stability in messaging and budgeting: some said frequent adjustments create uncertainty for local boards and taxpayers, while others asked whether the proposed transfers would unintentionally erode the Education Fund over time. Ritter said the modeling continues to carry the December 1 education-payment estimate (line 12) until more complete district budget data allow adjustments.
No votes were taken on GovRec items at this hearing; members requested additional detail from JFO and the Agency of Education on the sources and lasting fiscal effects of the one-time transfers.
