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Budget analyst warns revenue swings could erase adopted gains; FY2026 ending balance may fall under $30M
Summary
Keith Bybee told the Health and Welfare Committee that sales-tax softness and tax-conformity changes could wipe out a $152 million adopted revenue increase and leave the FY2026 legislative ending balance near $29.8 million, prompting requests for additional reduction plans from agencies.
Keith Bybee, division manager for budget policy analysis, presented a multi-year view of the general fund and warned that revenue volatility and recent tax-legislation proposals introduce significant uncertainty for FY2026. Bybee said the legislature's adopted revenue increase of roughly $152,000,000 could be "washed away completely" if conformity and other bills pass as structured, leaving an estimated legislative ending balance near $29,800,000 for FY2026.
Bybee traced the miss in 2025 (more than $100,000,000 below the legislature's adopted forecast), linked the shortfall to several months of below-forecast sales-tax collections, and explained trade-offs: accept one-time money to balance the near-term budget, pursue structural changes to reduce recurring costs, or use budget stabilization mechanisms. He noted that the Board of Examiners can access the budget stabilization fund in limited circumstances but transfers generally require legislation.
