Budget briefing: governor proposes roughly $70.7 billion, warns of multi‑year shortfall

Dave, the budget presenter, told the committee "the budget is about $70,700,000,000," and said the proposal grows roughly $505 million over the current fiscal-year funding plan while including $3 billion in deficiency appropriations. He said the governor’s plan reduces the FY27 structural gap to less than $400 million but that by 2031 the state faces an estimated $4 billion shortfall between revenues and spending.

Why it matters: The presentation framed the budget as a short-term improvement built on transfers and cuts, not a permanent fix. Committee members repeatedly pressed for where the long-term savings would come from and whether rating agencies would react to changes in reserves. "We still have this enormous challenge in the next few years," Dave said, describing the multi‑year outlook as a significant fiscal challenge.

Key details: The budget relies on a combination of spending reductions, transfers from special funds and some revenue adjustments. Dave said nearly three-quarters of the near-term solution is spending reductions. The proposal assumes $2.2 billion in the rainy day fund (about 8% of general fund revenues) and reduces a planned additional rainy day contribution of about $449 million.

Context and next steps: The presenter flagged several items for further scrutiny: tax-decoupling choices (where the state will accept or reject recent federal tax changes), potential underfunding of behavioral health and DDA services, and a large, unresolved potential liability from the Child Victims Act. Committee members requested analyses and county‑by‑county details; Dave pointed them to the fiscal briefing pages and said the legislature can add to the budget through its process.

The committee recessed for five minutes to reset electronics before bill hearings.