Staff shows roughly $1 billion four‑year budget impact from growth‑factor update

Outlook technical staff presented the mechanics and projected outcomes of two approaches to updating growth factors for the 2026 review, showing the two options produce similar total dollar impacts but different category‑level results.

Corbin Nemeth described the standard methodology—measuring percentage change between the first and second fiscal year of a biennium and averaging across recent biennia—and the alternatives under consideration: Option A, which continues a pandemic‑excluded 3‑biennia average, and Option B, which returns to a historical 5‑biennia average that includes the pandemic years. "There are different larger impacts throughout," Nemeth said, noting that the two options are "about the same, about a 1,000,000,000 impact in 4 year and GFO," with Option A slightly higher.

Staff showed category‑level differences: DCYF rises to about 4.9% under Option A versus about 3.5% under Option B; low‑income health care and community behavioral health jump under both options (roughly 4.6% under Option A and higher still under Option B); Department of Corrections declines (about 1.2% under Option A, about 0.5% under Option B); and the 'all other' category falls when DCYF is separated (to roughly 0.17% under the 3‑biennia method). Nemeth framed these estimates against the Outlook accuracy report showing the 2527 maintenance level was underestimated by about 2.7% (~$2 billion).

The council adopted Option A later in the meeting, directing staff to implement the pandemic‑excluded averaging window for the next outlook cycle. Staff emphasized these are input and projection changes for the four‑year maintenance‑level outlook and do not constitute appropriations.