Mary Monroe, operating budget coordinator for the House Appropriations Committee’s Office of Program Research, told the committee that a preliminary maintenance‑level projection shows a negative $6,700,000,000 near‑general‑fund‑outlook (NGFO) balance by the end of the 2027–29 outlook period.

The projection, Monroe said, covers maintenance‑level costs only — obligations staff consider required to continue current programs — and does not include policy‑level additions such as program expansions or new collective bargaining agreements. “Our analysis shows a very preliminary maintenance level problem statement of negative 6,700,000,000 NGFO, before any policy level items are assumed,” Monroe said.

The figure follows staff estimates that the state’s three‑budget system holds more than $173,000,000,000 in total funds for the current biennium and that the operating budget is nearly $141,000,000,000, with roughly half of operating spending classified as NGFO funds. Monroe told members that the current enacted biennium remains balanced under the November revenue forecast but that the projection shows a $4.4 billion NGFO shortfall for the 2025–27 biennium and $6.7 billion for 2027–29 when maintenance items alone are counted.

Monroe summarized major drivers pushing maintenance costs above historical norms: higher maintenance‑level caseload forecasts for programs such as transition to kindergarten and working connections child care; inflation adjustments required by statute for K‑12; debt service; and the end of temporary federal COVID‑related funds. She said staff estimated maintenance‑level costs of about $11,500,000,000 NGFO over the period shown in the presentation.

On revenue and reversions, Monroe said the November forecast used in the outlook is lower than the February 2024 forecast that underpinned the enacted budget. She said NGFO revenue for the six‑year window had declined by $972,000,000 compared with the forecast used in the 2024 session. Regarding reversion assumptions, Monroe told Representative Caldier that fiscal year 2024 reversions reflected actuals of about $400,000,000 and that staff assume 0.5% reversions for fiscal years 2025 through 2029.

Representative Coacheur asked a clarifying question about assumptions for the 2027–29 column: “the 27/29 column assumes a 4.5% revenue, correct?” Monroe replied, “Mhmm. That’s correct.”

Monroe explained the two reserve concepts that affect the picture: the NGFO ending balance and the constitutionally created Budget Stabilization Account (BSA). She said including the BSA reduces but does not eliminate the projected deficits for 2025–27 and 2027–29 under the maintenance‑level scenario.

Monroe and staff emphasized that the outlook is preliminary and that values will change as the Economic and Revenue Forecast Council updates revenue and as caseload/per‑capita cost forecasts are refreshed in March. “We will have a new revenue forecast in March, we’ll have new caseload and per capita cost forecast in March,” Monroe said, noting those updates could shift numbers but that staff did not expect dramatic changes during the session.

The committee did not take formal action on the presentation; the session consisted of the staff briefing followed by member questions and closed with the chair adjourning the meeting.