Transcript Highlights:

• And I think it's important to also recognize this is not current sales tax that we're collecting.
• And I think it's important to also recognize this is not current sales tax that we're collecting.
• We would have been receiving, you know, 100% of those new sales tax.
• So just to confirm that what I'm hearing is that existing tax revenues are not affected.
• advantage or whatever, tax preference.

Committee: House Revenue and Taxation

Transcript Highlights:

• An additional $540.6 million related to proper tax relief.
• I mean, because we're not, the property tax payers aren't.
• Not from local property taxes, but from state tax resources to those districts that are funded. funded
• by a mixture of state aid and local property taxes.
• home tax rate.

Committee: House Appropriations - S/C on Article III

Transcript Highlights:

• </c> you could direct any or all these taxes you could direct any or all these taxes to<00:35:28.000>
• The proposed new EMHCA tax is a tax that hits small businesses and individuals particularly hard.
• </c> tax credits. tax credits.
• Dan Andre: Health plans are already currently paying taxes, and any of these taxes could be dedicated
• ><c> an</c> already taxed at an already taxed at an 8.86%<01:49:09.840><c> rate.

Committee: Senate Health and Human Services

Transcript Highlights:

• The Department of Business and Professional Regulations, Thank you. monthly excites tax.
• That no-fault system is paid for by excise taxes from each vaccine that is administered.
• In Loudoun County, Virginia, more than half of the local tax revenue comes from data centers.
• In Grant County, Washington, property tax revenues have climbed 1,277% to $54 million.
• Tax-wise?

Bills: S0408 , S0986 , S0678 , S0800 , S1050 , S0484 , S1118

Committee: Senate Regulated Industries

Summary: The Committee on Regulated Industries considered several bills and took final action on each. SB 986, by Senator Gruters and presented by Senator Rodriguez, would prohibit smoking or vaping marijuana in public places and in certain indoor spaces; restaurant and lodging representatives supported adding marijuana and vaping to clean indoor air rules but asked to preserve designated smoking areas on private property, while cannabis advocates warned the bill was overly broad and could affect patients and property rights. The committee voted the bill favorably. SB 678, by Senator Mayfield, would restore statutory authority for DBPR to continue allowing alcohol distributors to deduct unsellable alcohol from monthly excise tax calculations; the committee adopted a strike-all amendment and reported the committee substitute favorably. SB 800, also by Senator Mayfield, increases penalties for repeated unlicensed engineering practice and creates an engineering student loan assistance program for engineers working for state agencies and water management districts; after adopting an amendment clarifying eligibility, the committee reported the bill favorably. The committee then heard SB 408, by Senator Grall, which would create a Florida cause of action against vaccine manufacturers that advertise in the state, allowing injured individuals to sue in Florida courts. Supporters argued the bill would rebuild public trust and hold manufacturers accountable, while opponents from the Florida Justice Reform Institute, American Tort Reform Association, BIO, the U.S. Chamber Institute for Legal Reform, and several medical and business groups argued the field is largely preempted by federal law, that existing federal compensation programs already address vaccine injuries, and that the bill raises First Amendment and policy concerns. After debate focused on vaccine injury data, compensation rates, and liability, the committee voted SB 408 favorably. The committee also considered SB 484 and SB 1118, both by Senator Avila, dealing with data centers. SB 484 would preserve local planning authority, bar nondisclosure agreements that prevent disclosure of potential data center development, require the PSC to set large-load tariff requirements so data centers pay their own costs, and limit consumptive use permits for large-scale data centers absent no harm to water resources and compliance with local zoning; supporters emphasized ratepayer protection and economic development, while some witnesses urged flexibility for behind-the-meter projects and confidentiality in negotiations. The bill was reported favorably. SB 1118 would create a time-limited public records exemption for county or municipal information about data center siting and protect proprietary business information; Senator Pizzo raised concerns about how the exemption would affect disclosure of competing projects and local officials’ ability to speak, but the sponsor said he would work on clarifying the language. The committee also passed SB 1050, by Senator Calatayud, which requires veterinarians to provide pet owners with written prescriptions and information about pharmacy choice while preserving veterinary judgment and emergency dispensing authority. The meeting concluded after all bills were reported favorably and members recorded additional votes on prior items.

Transcript Highlights:

• </c> less ability to generate tax revenue. less ability to generate tax revenue.
• ,</c><00:41:49.839><c> per</c> per capita, sales and use taxes, per per capita, sales and use taxes,
• </c> adalorum taxes. adalorum taxes.
• , as opposed to sales and use tax.
• use</c><00:45:33.920><c> tax.

Bills: HB0105 , HB0107 , SF0002

Committee: House Appropriations

Transcript Highlights:

• It breaks fundamental tax principles by taxing a business's inventory.
• Isn't that a tax loophole? I I &gt;&gt; Right. Isn't that a tax loophole?
• </c> &gt;&gt; with preferential tax rate? &gt;&gt; with preferential tax rate?
• Now, we have zero taxes.
• </c> Now, we have zero taxes. Now, we have zero taxes.

Committee: Senate Health and Human Services

Summary: The committee heard testimony on several health-related measures, with most of the discussion focused on bills addressing tobacco/vape enforcement, psychology licensure, hospital price transparency, prior authorization, and medical cannabis. The chair opened by explaining the one-minute testimony limit and that written testimony had been reviewed. For SB 2175 on disposable electronic smoking devices, the Department of Health said the bill’s placement in litter-control law was not a good fit because disposable e-cigarettes contain hazardous materials like lithium and nicotine, but it supported the intent and pointed to a related measure. Public health and tobacco-control advocates strongly supported the bill, citing youth use, toxic waste, battery fires, and the need to tighten definitions and remove exemptions; a long list of organizations and individuals were noted in support, with no opposition mentioned. For SB 2410, which would create a state directory and enforcement tools for authorized e-cigarette products, the Attorney General’s office strongly supported the measure and said it would help enforce the FDA-authorized list of products through certification, inspections, and civil penalties. The Department of Health said thousands of illegal products remain on the market and cited youth usage rates, while public health groups also supported the bill. One tobacco industry-related witness was noted in opposition. SB 2080, the psychology interjurisdictional compact, drew support from the Department of Corrections, which said it had severe staffing shortages and that the compact would help fill gaps, especially for forensic psychology and neighbor island facilities. Some committee members raised concerns about whether the compact would loosen licensure standards and reduce licensing revenue, and the Board of Psychology was said to be meeting and had not taken a formal position; testimony also noted the need for resources if the compact were adopted. The committee also heard SB 2276 on surgical assistance, with DCCA in opposition and a supporter from the field, but little discussion followed. SB 2277 on hospital price transparency drew support from consumer and patient advocates, who argued that clearer pricing would reduce medical debt and help patients shop for care; DCCA and the Department of Health offered comments, with the department suggesting an alternative enforcement model using outside review entities and noting that implementation would require significant staffing and funding. The Healthcare Association of Hawaii opposed the bill, saying federal transparency rules already cover the issue and state law could create duplication. SB 2282 on prior authorization received comments from insurers and providers; HMSA asked that the bill be set aside pending the report of the prior authorization working group created by Act 151, while the Hawaii Medical Association said prior authorization is a major burden but deferred to regulators on resources. Finally, SB 2413 on medical cannabis was supported by the Office of Medical Cannabis and others, who said the bill would close a patient-access gap by allowing viable seed sales; one witness suggested clarifying jurisdictional language and allowing dispensaries to sell seeds to each other. The committee then began SB 2425 on health insurance, where an addiction treatment provider testified that insurers’ refusal to honor assignment-of-benefits payments can delay reimbursement and create relapse risk for patients, but the transcript cuts off before further action on that bill.

Transcript Highlights:

• excise tax.
• tax and adjusted the excise tax so the change would be revenue-neutral.
• The blue bar represents the estimated sales tax revenue, and the yellow bar represents the excise tax
• The decline, as I noted, in sales tax revenue around 2010 reflects the fuel tax swap, which, as I noted
• Taxes are driving up the cost.

Summary: The Senate Committee on Energy, Utilities and Communications held an oversight hearing on managing the transportation fuels transition, fuel pricing, and supply reliability. Chair Allen opened by discussing prior legislation, including SB 1322 and special session measures, that expanded reporting to the California Energy Commission (CEC) and gave the state tools to study gasoline costs, refinery margins, inventories, and potential supply disruptions. He framed the hearing around refinery closures, rising imports, global conflict affecting crude markets, and the need to balance affordability, reliability, and the state’s long-term clean-fuels transition. CEC Vice Chair Siva Gunda, CDTFA Chief Deputy Director Gentian Droboniku, and DPMO Director Ty Miller presented data showing California’s growing dependence on imported crude and refined products, declining in-state refining capacity, and stable-to-tight inventories that are being supported by higher imports. They said the new transparency laws have improved understanding of the market and pointed to the proposed Gateway Pipeline, marine imports, and distribution constraints as important supply issues. CDTFA and DPMO emphasized that retail margins, especially for branded gasoline, have widened significantly, with large price gaps between branded stations and hypermarts/unbranded stations, and that some of the recent price increases were tied to the Iran conflict while earlier spikes were more consistent with localized market behavior and possible price gouging. DPMO also said it is investigating high-priced branded stations, monitoring algorithmic pricing under AB 325, and continuing to analyze diesel spot-market transparency. The CEC and CARB also discussed the Transportation Fuels Transition Plan and the SB 237 assessment, describing them as efforts to plan for a managed decline in fossil fuel demand while protecting workers, communities, and consumers. They said California’s climate goals remain centered on an 85% greenhouse gas reduction by 2045, with continued use of liquid fuels expected but with lower-carbon alternatives, more efficient vehicles, and alternative fuels playing a larger role. Committee members focused heavily on workforce impacts, the need for concrete transition planning, and whether the agencies could provide a clearer picture of what California’s fuel system will look like under the state’s long-term goals. No votes or formal actions were taken during the hearing.

Transcript Highlights:

• of sales tax, for housing.
• sales tax, for housing.
• The Metro sales tax is a funding source that MHFA receives—25% of the 0.25% Metropolitan sales tax that
• </c> only reflects five months of sales tax only reflects five months of sales tax collections<00:30:
• </c><00:32:03.799><c> allowed</c> the proceeds from this tax are allowed the proceeds from this tax are

Committee: House Housing Finance and Policy

Transcript Highlights:

• The expiring federal tax credits are acting as a forcing function for California's next moves.
• And do you know the total value of the tax... ...credit?
• And like I said, this is not some abstract, oh, developers aren't going to get tax credits.
• Not some abstract developers aren't going to get tax credits.
• Solar is going to start paying property taxes. So this is really urgent.

Summary: The Assembly Committee on Utilities and Energy held an oversight hearing on accelerating clean energy development and helping projects capture expiring federal tax credits. The chair framed the hearing around federal actions under HR 1, which sharply shortens the timeline for wind and solar projects to qualify for tax credits, and Governor Newsom’s Executive Order N-3325, which directs state agencies to speed siting, permitting, and construction. Sarah Fitzsimmons of the Independent Energy Producers Association explained the federal deadlines, the shift from the 5% safe-harbor test to a physical-work test, and the main bottlenecks California projects face, especially interconnection delays, environmental review, and limited transparency around self-build options for network upgrades. Panelists from the Union of Concerned Scientists, Southern California Edison, and EDF Power Solutions largely agreed that transmission constraints, permitting, and queue management remain the biggest barriers. UCS emphasized long-standing transmission delays, the need for more accountability and standardized reporting, and the importance of keeping reforms focused on the projects most likely to reach completion. SCE said it has increased interconnection throughput through process changes, digital tools, and coordination with regulators, while noting that developers and utilities must work closely together on project-specific issues. EDF described how overlapping permitting, interconnection, and procurement timelines create risk, and argued that clearer policies on self-builds, equipment standards, and affected-system studies could help reduce delays. State agency representatives from the CPUC, CAISO, and Go-Biz reported strong recent clean energy progress, including record levels of new capacity and battery storage coming online, and described ongoing efforts such as the Integrated Resource Planning process, General Order 131-E updates, the Transmission Project Review Process, the Transmission Development Forum, and the TED Task Force. They said these efforts are helping identify delays, improve transparency, and coordinate solutions, including possible self-build arrangements and local permitting reforms. Committee members pressed the agencies on who is ultimately in charge of the effort, whether the state has quantified the ratepayer impact of losing federal tax credits, and whether the 90-day report required by the executive order is complete; the agencies said the report is still in development. Public commenters echoed the need to move beyond monitoring toward stronger prioritization and accountability to meet the 2029 and 2030 project deadlines.

Transcript Highlights:

• Which supported 1.2 million jobs and generated $12.6 billion in local and state taxes.
• So with this tax credit, it is our framework to say, we want you here. We want you filming here.
• Priorities that we have in California include the affordable housing tax credit and the R&D tax credit
• I hope that we use this as a model for other tax credits when we're talking about employment.
• I recognize that a lot of that language is supportive or could be prohibitive of local taxes.

Committee: House Arts, Entertainment, Sports, and Tourism

Transcript Highlights:

• This is a local bill tweaking the charter and tax remediation bill.
• Tax Receipts.
• Local business taxes are about efficiencies.
• authority known in Chapter 205 as a Local Business Tax.
• What tax dollars, US tax dollars are currently being used in this $40 million a week funding?

Transcript Highlights:

• Town clerks can also be tax collectors and deputy tax collectors, and that mix.
• Town clerks can also be tax collectors and deputy tax collectors, and that mix.
• Haley. tax collector, deputy town clerk, etc. tax collector, deputy town clerk, etc.
• </c> keep up with rising property taxes. keep up with rising property taxes.
• or other tax exemptions and credits don't actually decrease the total tax effort or the total tax burden

Committee: Senate Election Law and Municipal Affairs

Transcript Highlights:

• honest tax returns.
• ><00:58:57.440><c> services,</c><00:58:58.240><c> your</c> taxes, but also the tax services, your taxes
• </c> and so forth is how can we keep the tax and so forth is how can we keep the tax code<00:59:23.120
• Tax fraud is you please. Thank you.
• </c> year that we have saved or protected tax year that we have saved or protected tax dollars.<01:13

Bills: HF1338

Committee: House State Government Finance and Policy

Transcript Highlights:

• >> Um, the legislature establishes the tax credit. >> How much do these tax credits sell for?
• So, if it applies to all tax credits, including those that were issued, housing tax credits, right?
• >> The value of the tax credit.
• ><c> tax.
• </c> to do tax. Is that your understanding? to do tax. Is that your understanding?

Summary: The committees heard testimony on five housing-related measures. SB 2232 would create a three-year tiny home grant pilot program within HHFDC, with annual reporting to HHFDC and the Legislature; testimony was mixed, and the bill was later recommended for passage with amendments, including a full-time housing development specialist, a residential-use-only restriction for the tiny homes, and a blanked appropriation. SB 2192 would bar county down-zoning that reduces housing capacity unless equivalent capacity is added elsewhere in the county; it drew support from housing advocates and comments from planning officials, and was also recommended for passage with amendments. SB 2378 would clarify insurance requirements for single- and multifamily projects seeking expedited county permitting; engineers and housing groups supported it, while one testifier opposed it, and it was recommended for passage with a technical amendment. SB 2524 would appropriate funds to the City and County of Honolulu for housing-related departments to comply with prior acts; the Honolulu department supported it, and members asked about prior spending and funding sources. SB 2398 would require residential housing utility availability maps; the Honolulu Board of Water Supply opposed the bill as written, citing infrastructure security, accuracy, liability, and administrative burden concerns, while supporters said it would improve transparency for developers. The chair proposed amendments to make the maps broad and geographic rather than parcel-specific, remove contested-case and reliance provisions, allow disclaimer language, and change the date; the bill was then recommended for passage with amendments, with one member noting reservations. All five measures were ultimately passed out of committee with amendments, with votes recorded and some members excused.

Transcript Highlights:

• The purpose of this bill is to provide a reduction in the personal income tax.
• The House of Delegates lowered the income tax reduction from 10 percent.
• The House of Delegates lowered the income tax reduction from 10 percent.
• The House took out the tax credits. Got it. Thank you. Further discussion.
• income tax.

Summary: The Senate first considered confirmations from Senate Executive Message No. 4. On a 33-0 vote, it confirmed all nominees except number 54, then separately confirmed nominee 54 on a 30-3 vote. The special order of business was then closed. The chamber then took up a series of House-amended bills and generally concurred in the amendments before passing each bill. These included SB 723 on law enforcement cooperation with bordering states; SB 947 on birth certificate copies for homeless minors; SB 392 on personal income tax reduction; SB 54 on criminal penalties for abuse or neglect of incapacitated adults; SB 228 on technology in child abuse and neglect investigations, including a three-county caseworker aid pilot; SB 231 on value-based payment requirements; SB 402, the Workforce Readiness Opportunity Act, with House removal of tax credits and other provisions while retaining micro-credential programs; SB 553 on transfer of contractor licenses to qualifying immediate family members; SB 575 on refusal review hearings; SB 686, the Coal Tenancy Modernization and Miners' Protection Act; SB 906 on lawful prescription of crystalline polymorph psilocybin under FDA recommendations; and SB 1226 on penalties for disturbing religious worship. Most final passage votes were unanimous or near-unanimous, and several bills were made effective from passage or given a specific effective date. Later, the Senate concurred in House amendments to SB 63, the Creating Sustaining Opportunities for Academics and Rural Schools Act, after discussion noting the House removed county charter school language and changed the effective date. The bill passed 32-2 and was made effective from passage. The Senate also concurred in amendments to SB 502, the Women's Collegiate Sports Protection Act, and SB 153, creating the Unemployment Automation and Administration Fund; SB 502 was set to take effect July 1, 2026, and SB 153 was also made effective July 1, 2026. Finally, the Senate reconsidered and again passed SB 392 by a 32-2 vote. The session ended with several introductions, announcements, and a recess until 5:30.

Transcript Highlights:

• And what it does here is establish a B&O tax rate of 3.1% for payment...
• a B&O tax deduction for certain fees related to payment credit card processing.
• In Washington, sometimes you get taxed a little bit.
• get spent and a 10% tax on the credits that get banked.
• This is a new tax on zero-emission vehicle credits. That's what it is. It's a new tax.

Summary: The Senate opened with a moment of silence for Senator Chris Gildon’s wife, Autumn, who had died earlier that day. Members then took up several bills on final passage, moving most of them directly from second to third reading by unanimous consent. Substitute House Bill 2020, dealing with payment card processing activities, was described as resolving a long-running dispute with the Department of Revenue by setting a 3.1% B&O tax rate and allowing certain deductions; it passed 47-0. House Bill 2039, which delays expansion of child support pass-through from 2026 to 2029, drew some opposition over reducing support to custodial parents but passed 25-22. House Bill 2040, delaying elimination of recoveries from the aged, blind, and disabled assistance program from 2025 to 2028, also passed 25-22 after similar debate about protecting vulnerable recipients. Substitute House Bill 2051, concerning payment to acute care hospitals for difficult-to-discharge patients, passed 27-20 after several proposed amendments were withdrawn. Engrossed Substitute House Bill 2061, imposing a 10% concession fee on duty-free sales to fund tourism promotion and sustainable aviation fuel, passed 27-20 despite Republican concerns it was a tax increase that would be passed on to consumers. Substitute House Bill 2077, which creates taxes on certain zero-emission vehicle credit transactions, defeated an amendment that would have removed the tax on banked credits; supporters framed it as encouraging use of credits and clean transportation investment, while opponents called it a targeted “Tesla tax.” It passed 28-19. The Senate then returned to Engrossed Substitute House Bill 1293, a litter and plastic bag policy bill. After the House refused to concur in Senate amendments, the Senate receded, adopted a striking amendment, and passed the bill 27-20. The chamber then adjourned until April 27, 2025.

Transcript Highlights:

• This is a tax. We call it a fee, but a federal judge deemed it a tax.
• It is a tax. Mr.
• This tax, I believe, has now been considered by the courts to be a tax rather than a fee.
• can transfer through property tax, lack of paying property tax, Mr.
• President, Senator, any time preferential tax treatment is Anytime preferential tax treatment is represented

Summary: The Senate met with a quorum, opened with an invocation, pledges, and a series of announcements recognizing West Side Day, School Board Appreciation Day, Sierra Club Climate Solutions Day, Gallup-McKinley County Day, and New Mexico Athlete Trainer Day. Members also agreed to allow cameras on the floor and a relaxed dress code for guests. Numerous student and community groups were introduced, including West Side Day students, ABC Prep basketball students, Bernalillo High School AP students, MANA del Norte Hermanitas, honorary lieutenant governors, Taos Municipal Schools leaders, Classical Conversations homeschool students, Bloomfield school board members, and others. A major portion of the session was devoted to honoring Bueno Foods with a Senate certificate recognizing February 5, 2026, as Bueno Foods Day in the Senate and celebrating the company’s 75th anniversary. Senators praised the Baca family’s multigenerational business, its role in New Mexico’s chile industry, its jobs and community support, and its national reach. Several members spoke in support, sharing personal stories about Bueno products and the company’s help during COVID and over decades of family and community life. The Senate also adopted a condolence certificate for Kayla Reagan Van Landingham, a 19-year-old bicyclist killed in Albuquerque, with remarks emphasizing her life, advocacy, and the need for stronger pedestrian and bicycle safety. Her mother and family were recognized, and members observed a moment of silence. Senators spoke about the importance of traffic safety reforms and the local ordinance changes already pursued in her memory. On legislation, the chamber received House and governor messages and adopted several committee reports. The main floor debate was on Senate Bill 38, concerning the spay and neuter program funding stream. Senator Block offered a floor substitute to restore a sunset clause for review and transparency; supporters argued the program should be periodically evaluated and that the funding functions like a tax rather than a fee. Opponents argued the program is important and should continue without a sunset. The floor substitute failed by roll call, 15 in favor and 22 against, and the Senate returned to the underlying bill for further debate.

Transcript Highlights:

• tax.
• And make no mistake about it, unlike the president's tax cuts for the very wealthy, our tax cuts are
• </c> to afford the president's tariff tax. to afford the president's tariff tax.
• </c> year, I'm proposing an unprecedented tax year, I'm proposing an unprecedented tax cut<00:20:19.760
• We've never the statewide sales tax.

Transcript Highlights:

• Tax relief that our that our state.
• any property tax reduction.
• </c><00:29:52.240><c> increase</c> not the largest property tax increase not the largest property tax
• I wish people taxes were concerned.
• </c> they ask why their property taxes go up. they ask why their property taxes go up.

Summary: The Finance Committee met on October 30 to act on a series of House bills that had been moved during the budget process and, in many cases, were already addressed in the state budget. The chair explained that bills covered by the budget would generally be reported inexpedient to legislate, while some others would be placed on the consent calendar or handled separately. Early votes were largely unanimous, including House Bill 54, which would allow alternate treatment centers to operate for profit; the committee voted 25-0 ought to pass and sent it to the consent calendar. The committee then recommended inexpedient to legislate on House Bill 97, a wastewater and infrastructure appropriation bill, because the funding had been replaced in House Bill 2 with $2.5 million in each of fiscal years 2026 and 2027. Representative Rum opposed the ITL motion, arguing the projects would otherwise burden local property taxpayers and that the funding was important for housing and municipal infrastructure, but the motion passed 14-11. House Bill 111, dealing with the right-to-know ombudsman, was also reported ITL 14-11 on the grounds that the budget already made significant reforms and separate action could create conflicting statutory language. House Bill 164, creating funding for a local government records manager position in the Secretary of State’s office, received a unanimous amendment appropriating $150,000 for fiscal year 2027 and then passed 25-0 ought to pass as amended, moving to the regular calendar. House Bill 197, the Property Tax Relief Act, drew extended debate over whether restoring a state contribution to retirement system costs would reduce local property taxes; supporters framed it as tax relief for municipalities and school districts, while opponents said the effect would be minimal or offset by other retirement-system changes. The committee ultimately voted 14-11 ITL, with a minority report requested. House Bill 215, requiring landfill permit applicants to submit a report on potential harms and benefits, was amended and then passed 25-0 ought to pass as amended. House Bill 216, which would remove a workers’ compensation-related service-credit limit for certain disability retirement cases, was voted ITL 25-0 after the sponsor said the fiscal impact was too uncertain. Finally, House Bill 219, which would redirect renewable portfolio standard funds and was amended to delay its effective date to July 1, 2027, advanced after debate over electricity costs and renewable energy policy; the committee adopted the amendment unanimously and then voted on the bill as amended.

Transcript Highlights:

• tax cuts.
• tax cuts.
• money to cut taxes.
• , or if it’s corporate franchise taxes, or if it’s really that sales tax.”
• “It’s sales tax, ma’am.

Committee: All JOINT BUDGET COMMITTEE

Summary: The committee first considered revisions to the JBC rules, which staff said were all prompted by acts passed in the 2025 legislative session. The rules were adopted without objection. Members then received a balanced budget presentation from DFA Secretary Jim Hudson on the governor’s FY27 proposal, which he said was built around three priorities: limiting state government growth, continuing investments in education, and advancing income tax cuts. He highlighted major additions for education funding, EFA growth, pay plan costs, higher education productivity funding, drug task forces, corrections medical costs, the governor’s 1033 initiative, SNAP error-rate reduction, and Medicaid sustainability, while also explaining a new A/B funding category structure intended to prioritize recurring costs and preserve room for tax cuts. Members questioned Hudson about the cost of income tax reductions, the constitutional balanced-budget requirement, education funding, the Educational Adequacy Fund, Medicaid trust fund balances, and the impact of federal changes on Medicaid and SNAP. Hudson said each tenth of a percent income tax cut would cost about $58 million, the budget remained balanced, public education would still receive historic increases, and the Medicaid trust fund would be monitored closely with additional set-asides proposed. He also said the FY27 SNAP administrative cost increase would be about $18 million. The committee then heard from the Division of Higher Education, which reported institutions were 2.61% more productive overall and that the budget recommendation followed the statutory productivity formula. Questions focused on why some institutions were receiving decreases or large increases, how the formula works, and how the new return-on-investment metric and committee composition would affect future funding. The committee approved several higher education-related actions, including personnel changes for nine institutions and special language for North Arkansas College’s move into the University of Arkansas system. Staff then walked members through the higher education appropriation summary, explaining large percentage increases at several institutions were tied to federal funds or corrected carry-forward issues, including the U of A School of Mathematical, Sciences and the Arts, South Arkansas College, SAU Tech, ASU Mountain Home, and ASU Newport. Members also discussed UAPB’s 1890 extension program and the University of Arkansas Division of Agriculture’s land-grant matching funds; officials said UAPB’s recommendation was being aligned with actual spending and that the Division of Agriculture’s Smith-Lever and Hatch matches were included within its overall appropriation. The committee ultimately adopted the Higher Education Coordinating Board’s recommendations for all institutions and then moved on to the Department of Corrections section, with the chair outlining how the committee would proceed through those appropriations by section.