Director Salih told the Appropriations & Finance committee that staff and the Department of Finance and Administration (DFA) had agreed on guidance to limit agencies’ ability to move funds across budget categories at the start of the fiscal year.

"That general authority is that every agency can move money between categories, and if they have other revenue sources besides federal funds can increase it up to 5%," Director Salih said, describing the language previously discussed and the revised approach staff are recommending.

Salih said DFA would direct agencies at the start of the fiscal year not to do budget adjustments between categories unless correcting a clear error in House Bill 2 and that agencies should not increase other state funds or transfers by more than 2.5% in the first quarter. Salih said Legislative Finance Committee (LFC) objections would trigger withdrawal of the bar under the proposed administrative process rather than allowing the adjustment to automatically take effect under current law.

A staff member identified in the meeting as Miss Hilla pointed out a technical wording change in the fiscal year 2026 budget adjustment authority: the language should read "Vocational Rehabilitation Division" rather than "division of vocational rehab." Miss Hilla directed members to page 17, line 70, for the specific insertion.

Vice Chair Dixon moved that the committee adopt the HAFC proposal for budget adjustment requests; Representative Sanchez seconded the motion. The transcript records the motion and second but does not record a committee vote on that motion during the excerpted discussion.

Committee members did not ask further questions during the recorded discussion and staff said they would develop implementing guidance with DFA using administrative procedures similar to prior budget guidance.