Administration seeks legislative partnership to use settlement proceeds, senators demand transparency on $3M transfer

The budget wrap‑up highlighted the administration’s short‑term tools to manage FY2026 cash pressures, including selective borrowing, deferred expenditures and limited use of the budget stabilization fund.

Julia Rhymer reported the budget stabilization fund had about $14.6 million on Aug. 7 and that an additional $3 million had been utilized through Aug. 27, 2026. Later questioning revealed that the $3 million was used to address an emergent issue at the Waste Management Authority. Several senators demanded more public detail about who authorized the draw and why the legislature was not notified before the transfer; Rhymer and Commissioner Mccertie said agency staff coordinated with legislative leaders and that the move was made during a short‑term emergency when no cash was immediately available on the operating line of credit.

OMB also said the administration is seeking legislative partnership to consider reprogramming available settlement proceeds — identified in testimony as funds from an Epstein and Leon Black settlement — to help offset shortfalls and reduce pressure on the general fund. The administration framed this as a collaborative step requiring legislative action.

Why it matters: the use of stabilization funds and settlement proceeds can relieve immediate cash pressure but raises oversight and transparency concerns. Senators demanded on‑the‑record justification and a timeline for replenishment of the stabilization fund.

Follow‑up: OMB agreed to provide documentation about the $3M transfer, the specific reason it was used, and a plan for returning funds or restating the line‑item treatment for the appropriation.