Transcript Highlights:

• Turning now to the fiscal impact of the proposed substitute.
• Sections 3 and 4 show the impact of the attendance policy change, with only centers impacted in 2027
• The Senate budget funds these administrative impacts in the 2729 biennium.
• expected to have a material impact on PERC's workload.
• expected to have a material impact on PERC's workload.

Summary: The House Appropriations Committee held a public hearing on a series of bills, beginning with House Bill 2689 on Working Connections Child Care. Staff explained that the proposed substitute would keep eligibility at 60% of state median income, eliminate scheduled expansions to 75% and 85%, reduce future subsidy rates from the 85th to the 75th percentile of market, end enhanced regional rates, and change reimbursement rules from prospective enrollment-based payments back to attendance-based payments with a reduced monthly payment after 11 absent days. Child care advocates thanked the committee for removing the proposed cap on the program but opposed the cuts to provider rates and eligibility expansions, warning of harm to families and providers. The committee then heard Engrossed Substitute Senate Bill 5124 on Medicaid network adequacy for post-acute care, with staff noting administrative costs and indeterminate fiscal effects; hospitals supported the bill as a way to reduce discharge delays and reliance on single-case agreements. Senate Bill 5832, which would raise the new motor vehicle arbitration fee from $3 to $6 to support the Lemon Law arbitration program, drew support from the Attorney General’s Office and auto dealers, who said the fee had not been updated since 1995 and the program was underfunded. The committee also heard Substitute Senate Bill 5862, providing a one-time 3% COLA for certain PERS 1 and TRS 1 retirees, with retirees testifying in favor and local government representatives warning about added employer costs. The committee next heard Senate Bill 5922, allowing school districts to transfer money from the Transportation Vehicle Fund to other funds if they reduce their fleet and receive OSPI approval; staff said the bill would mainly add administrative work for OSPI, and no one testified. Substitute Senate Bill 5923 would allow a hospital on an island in Skagit County to qualify as a critical access hospital if federally certified; Island Health testified that the designation would help sustain rural services, and a committee member asked about bed count and Medicaid/charity-care pressures. Senate Bill 5944 would require language access providers to bargain over compensation for missed or canceled appointments and clarify that statutes prevail over conflicting contract terms; WFSE supported the bill, saying it would equalize bargaining rights across agencies. Substitute Senate Bill 5972 would extend interest arbitration rights to correctional employees in city and county jails regardless of population size; labor supported the bill as a retention tool, while cities and counties opposed it, arguing it would raise costs and should include ability-to-pay protections. The committee also heard Senate Bill 5988, authorizing the Department of Health to continue accrediting opioid treatment programs and charge accreditation fees, which DOH said was needed to avoid winding down the program. Later, the committee heard Senate Bill 6151, which would move Ecology fee revenues for landfill methane emissions and laboratory accreditation into dedicated accounts; Ecology supported the bill as improving transparency and reinvesting fees into the programs, and staff said the lab fee shift would be offset by a related budget action. Engrossed Substitute Senate Bill 6194 would pay a rural hospital on a federally recognized Indian reservation, specifically Astria Toppenish, at 150% of the Medicaid fee-for-service rate beginning in 2027; hospital leaders and community members testified that the hospital serves a high-Medicaid, rural, and tribal population and faces persistent losses. Finally, Engrossed Substitute Senate Bill 6302 would direct L&I to investigate possible misclassification of independent contractors on public works projects involving multiple workers doing the same finishing work; labor and business representatives both described it as a negotiated compromise to address underground economy abuses. The committee took no final votes during the hearing and ended by reiterating amendment deadlines for bills scheduled for executive session.

Transcript Highlights:

• They are a young CASA program, founded in 2019, but have had a big impact on foster care children in
• that our taxpayers voted to have in their communities, by not allowing growth in our communities to impact
• But that impact is still not going to be of significance on these political subdivisions.
• But that impact is still not going to be of a significance on these political subdivisions.
• due diligence as a body to make sure that we are reviewing something that has such a significant impact

Summary: The House convened with prayer and the Pledge of Allegiance, approved the prior day’s journal by a 134-0 roll call vote, and then moved through a series of introductions recognizing guests and student groups at the Capitol, including Turning Point USA chapters, CASA volunteers and staff, JAG students, university groups, nursing students, and several legislative interns. The chamber also handled a point of order about an unauthorized prop in the room, which was removed. The first major bill taken up was House Bill 1766, dealing with personal property tax treatment and new construction calculations. Supporters argued it would treat personal property more like real estate under Hancock-style limits and provide fairness to taxpayers, while opponents warned it could reduce revenue for taxing districts. After debate, the House passed HB 1766 by a vote of 94-50. The House then considered House Committee Substitute for House Bill 2989, a major gaming measure that would criminalize illegal gaming machines, create a regulated framework for video lottery terminals, give local governments an opt-out, and expand enforcement authority for the Attorney General and prosecutors. Members debated whether the bill was a needed enforcement tool or an inappropriate expansion of gambling, with concerns raised about addiction, local control, revenue distribution, and whether the bill should have gone to Fiscal Review. A motion to refer the bill to Fiscal Review failed 69-44, and the bill itself passed 83-66 with one present. The chamber next took up House Committee Substitute for House Bill 2014, the supplemental appropriations bill. The sponsor said it provided just over $3 billion in additional authority, including tax refund authority, disaster relief, St. Louis tornado recovery funding, and major MoDOT funding, along with other smaller items. Members from both parties supported the bill, while also noting concerns about reliance on supplementals and the need to budget more accurately in the future. The House adopted an amendment reducing some general revenue authority, then adopted the bill and perfected and printed it. The meeting ended with announcements, including a notice that the Super Committee on Tourism would meet immediately in Hearing Room 6.

Transcript Highlights:

• This probably impacts about 2% of returns, maybe 4%.
• And right, you have to adjust for inflation. Right.
• Inflation is part of it. Population growth is another.
• What are we cutting here that's going to impact people?
• There will be a fiscal impact associated with the tax conformity.

Bills: HB2011 , HB2089 , HB2090 , HB2092 , HB2477 , HB2785

Committees: House Ways & Means , House House Ways & Means Committee of Reference

Keywords: individual income tax, subtraction, Arizona Revised Statutes, retirement benefits, adoption costs, charitable contributions, health insurance, premium payment, Arizona State Retirement System, contingent annuitant, long-term disability, benefits limitations, disability compensation, social security, retirement system, elected officials, ASRS, eligibility waiver, age 65, education savings

Transcript Highlights:

• The Affordable Care Act, its impact, and the current threats to it.
• Yeah, so that's largely the impact of H.R. 1.
• So I am going to be impacted.
• Our overall access to care is going to be incredibly impacted.
• The impact on patients is also multi-generational.

Transcript Highlights:

• These are projects that have an impact on communities.
• These individuals will be impacted.
• These individuals will be impacted.
• These individuals will be impacted.
• These individuals will be impacted.

Transcript Highlights:

• that they provide: the immediate impact, the secondary impact, the tertiary impact.
• AND THE ECONOMIC IMPACT THAT THEY PROVIDE, THE IMMEDIATE IMPACT, THE SECONDARY IMPACT, THE TERTIARY IMPACT
• anything else, which means inflation.
• On top of having said earlier that inflation is what inflation is, it is going to make things more expensive
• DEIS is a Draft Environmental Impact Statement.

Summary: The Senate opened with the Pledge of Allegiance and an invocation, then approved the prior day’s Journal and moved into motions, resolutions, and budget-related business. Senator Gianaris called up Senate Print 5898A for reconsideration; the Senate voted 59 ayes to restore the bill to the third reading calendar. Several amendments were also received on third-reading bills, and the Finance Committee was called into session while the chamber proceeded with resolutions. The Senate adopted Resolution J.2106 recognizing Second Chance Month and the mental health impacts of incarceration, with Senator Brisport speaking in support and a guest from the community recognized in the chamber. The body also adopted Resolution J.1492 designating May 27, 2026, as Taiwan Heritage Day, with remarks from Senators Sepúlveda, Stavisky, and Liu highlighting Taiwanese contributions to New York and expressing support for Taiwan amid current geopolitical tensions. The Finance Committee then reported several budget bills, including Senate Prints 9003D, 9004D, 9007C, and 9009C, which were moved to third reading. The remainder of the session focused on the supplemental and controversial budget calendars, especially tax and spending provisions. Senators debated the “Protecting Our Wallets” energy rebate, with supporters describing it as a one-time check for eligible taxpayers and critics arguing it was too small and not tied directly to utility bills; the chamber accepted the message of necessity and laid the bills aside. Members also debated extensions and changes to tax provisions affecting corporations, alternative fuel exemptions, Broadway and theatrical production tax credits, charitable deductions for certain 501(c)(3)s, nicotine pouch taxes, a new New York City pied-à-terre tax, and a standardbred horse-racing testing fee. Several senators criticized the budget as raising costs or favoring certain industries, while supporters defended the measures as revenue-raising, affordability, or public-health policies. No final votes on the controversial budget bills are shown in the excerpt beyond procedural rulings, adoption of the resolution calendar, and acceptance of committee reports.

Transcript Highlights:

• but the inflation-adjusted spending has come down slightly.
• When we adjust that for inflation, we still see an increase of about $50,000.
• If we had more single-celling, we’d have an impact on our homicide rate.
• But when we adjust that for inflation, the increase is about $50,000, or 68%. Okay.
• But with the rate of inflation and construction costs, we know that's $20 billion.

Summary: The Assembly Budget Subcommittee on Accountability and Oversight held a hearing on the California Department of Corrections and Rehabilitation (CDCR) budget, with a focus on prison population trends, spending, facility closures, and efforts to find savings. The Legislative Analyst’s Office (LAO) presented data showing the prison and parole populations have fallen sharply over the past 20 years while CDCR spending has remained high, driven largely by security, health care, litigation-related requirements, and aging infrastructure. The LAO also said the state is likely to have several thousand empty beds by 2030 and recommended closing another prison, identifying the Correctional Training Facility in Soledad as the strongest candidate, while also urging more transparency around facility deactivations and the Boston Consulting Group (BCG) efficiency contract. CDCR Secretary Jeff McCumber said the department faces structural budget pressures from retirement payouts, workers’ compensation, overtime, medical transport, aging facilities, and violence in prisons, but emphasized declining recidivism, expanding reentry beds, and the need for more single-celling and rehabilitation. Department of Finance representative Anthony Franzoa said the administration is not proposing another prison closure at this time, opposed new reporting requirements on deactivations, and said the BCG contract is intended to produce long-term savings even if near-term estimates are being revised downward. Amber Rose Howard of California United for Responsible Budget argued the state should close more prisons, redirect funds to community services, and stop spending on excess prison capacity. Members questioned why CDCR still relies on vacancy savings, why rehabilitation is only a small share of the budget, and whether the department should be more transparent about capacity reductions and legal liabilities. Several members criticized the $20 million BCG contract and the lack of competitive bidding, while others pressed CDCR on staffing levels, single-celling, suicide prevention, and health care costs for older incarcerated people. The hearing did not take a formal vote, but it ended with clear committee concern about CDCR’s budget transparency, the pace of prison closures, and the need to align spending more closely with the declining prison population and the department’s stated rehabilitation mission.

Transcript Highlights:

• Though we are clarify who is impacted.
• And we are already experiencing some of those impacts.
• And we are already experiencing some of those impacts.
• Fred Kashkari says that we're going to have inflation.
• Um, Delta we're going to have inflation.

Committee: Senate Taxes

Transcript Highlights:

• Worham's impact stands out.
• Worham's impact stands out.
• Worham's impact stands out.
• Worham's impact stands out.
• Worham's impact stands out.

Transcript Highlights:

• And finally, what impact do the current billing, coding, and claims system have on patient care?
• reimbursement adversely impacts facilities' ability to stay afloat.
• Consequently, impacting the quality of care that patients can receive.
• Adjusting only for inflation, the cost is estimated at $3.1 billion.
• Adjusting for inflation, that's $3.1 billion in 2023, or $3.93 per standard drink.

Committee: House Legislative Health & Human Services Committee

Transcript Highlights:

• Other impacts on the cost of living, as was stated, are inflation, supply chain issues, and housing affordability
• We can't affect inflation. We can't impact the supply chain challenges.
• We can't affect inflation. We can't impact the supply chain challenges.
• We can’t impact inflation, we can’t impact supply chain issues.
• and state impacts.

Committee: Senate Environmental Quality

Transcript Highlights:

• </c><00:13:11.440><c> uh</c> they're in the home so Co did impact uh they're in the home so Co did impact
• So what's the impact of that decision?
• , workforce; and three, inflation.
• </c> contractor um reported the fiscal impact contractor um reported the fiscal impact of<00:46:56.480
• um we've seen three key impact decision um we've seen three key impact in<00:47:39.839><c> three</c>

Summary: The Budget Review Subcommittee on Health and Family Services met with a quorum still coming together and first handled roll call and minutes. The main presentation came from the Department for Medicaid Services, with Commissioner Lisa Lee and CFO Steve Beckle giving an overview of Kentucky Medicaid, its federal-state financing structure, and the department’s 1915(c) home- and community-based waiver programs. They explained FMAP funding levels for traditional Medicaid, administration, IT, expansion adults, and CHIP, and noted the size of the program, including more than 600,000 Kentucky children eligible for Medicaid or CHIP, about 485,000 expansion adults, over 69,000 enrolled providers, and $18.5 billion in 2024 expenditures. A major focus was the waiver system, including the acquired brain injury waivers, model waiver, independence waiver, Michelle P. waiver, and Supports for Community Living waiver. The department said these waivers are intended to keep people with physical or developmental disabilities in home and community settings rather than facilities, and that many services are not covered by Medicare or commercial insurance. Officials described participant-directed services, interagency administration, and eligibility rules, including that some waiver programs use the child’s income only rather than family income. They also reported an unduplicated waiver wait list of 13,930 people and said the General Assembly had added waiver slots in the last budget, including 650 ABI slots and 1,275 more to be allocated July 1, 2025. The department also discussed a waiver rate study conducted by Guidehouse, explaining that CMS requires a defensible rate methodology because there is no Medicare or commercial benchmark for many waiver services. They said the study used cost and wage surveys, provider and stakeholder input, and aimed to improve transparency, provider stability, and rate parity. Officials reviewed prior COVID-era Appendix K rate increases and budget-driven increases, and said the budget ultimately funded rates at about 70% of the benchmark study, while preserving higher existing rates where needed so no provider would be cut. They highlighted larger differences in behavioral support and case management rates, and said a public report is available. Members asked several questions about the potential impact of federal FMAP changes, especially possible reductions in the enhanced match for expansion adults and Medicaid IT/admin activities. DMS said any FMAP reduction would require more state general fund dollars, estimating about $75 million for each 1% drop in the expansion match, while impacts on administrative IT funding would depend on the systems being built or implemented in a given year. Members also pressed for clarification on waiver wait-list procedures, funded versus filled slots, and what happens when someone on the wait list is later found ineligible. DMS said people on the wait list may not yet have been assessed, can be reevaluated if conditions change, and are still eligible for regular Medicaid state-plan services if they qualify, even if they are waiting for waiver services.

Transcript Highlights:

• damages to inflate returns.
• damages to inflate returns.
• Is this going to impact our... I have private insurance.
• Is this going to impact our access to care as well?
• School violence is very real and impacts millions.

Bills: HB2255 , HB2320 , HB2548

Committee: House Civil Rights & Judiciary

Keywords: litigation finance, legal funding, lawsuit, financial services, access to justice, firearm regulation, manufacturing, safety standards, background checks, license requirements, health care market standards, hospital consolidation, merger review, health care transaction notice, attorney general review, antitrust, provider organizations, hospital systems, contracting affiliation, material change

Transcript Highlights:

• So, factored in for inflation, we've taken a 31% cut over the same period of time. Tourism...
• With the cost of inflation and our costs, just building this new Earth nonprofit connection center, it
• So please let's account for some of this inflation and drive more people to Massachusetts, which will
• With inflation, that's roughly $2.86 a drink today.
• This tax is losing us money due to inflation and the cost per capita of alcohol-related harms, but more

Committee: Joint Joint Committee on Revenue

Summary: The Joint Committee on Revenue held a hybrid hearing on a large slate of bills related to advertising, economic development, tourism, digital advertising, delivery taxes, and alcohol taxation. The first panel supported H. 3249, which would create a high school trade partnership program linking public schools with private employers, especially in manufacturing, and would offer employers a tax credit for participation. Representative Soder, Uxbridge High School leaders, and others argued the bill would strengthen career pathways, build a skilled workforce, and keep students and jobs in Massachusetts. The committee then heard testimony on H. 3031 and S. 2003 to modernize the Massachusetts Tourism Trust Fund by dedicating an additional share of hotel occupancy tax revenue to tourism promotion. Tourism and hospitality representatives from Cape Cod, Southwick Zoo, and Indian Ranch said the proposal would not raise taxes but would reinvest existing visitor-generated revenue into marketing that supports jobs, local businesses, and municipal tax receipts. A tech-industry coalition opposed several digital advertising tax bills and a delivery tax bill, warning they would raise costs, create uncertainty, and burden consumers, small businesses, and delivery workers. The largest portion of the hearing focused on S. 2029, which would raise the alcohol excise tax by 10 cents per drink and dedicate the revenue to public health programs. Public health experts, advocates, a student prevention leader, and representatives from Jane Doe, Inc. argued the tax would reduce alcohol-related harms, address decades of inflation-driven erosion in the tax, and generate substantial new funding for prevention, treatment, domestic violence services, and community schools. Committee members asked questions about the current tax structure, inflation, and how the proposal compares with neighboring states. No votes were taken during the hearing, and the chair adjourned after public testimony concluded.

Transcript Highlights:

• And for our industry, that is beginning to have an impact on the ability to get developments approved
• And for our industry, that is beginning to have an impact on the ability to get developments approved
• Let's talk about inflation.
• If you look at our regional inflation, just in 2022, the inflation rate was 9.1%.
• If you look at our regional inflation, just in 2022, the inflation rate was 9.1%.

Committee: Senate Local Government and Taxation

Transcript Highlights:

• only as a representative of the student body, but as a proud minor that has firsthand witnessed the impact
• And that institution now has had a profound impact in producing primary care doctors where those rural
• But I'm just wanting to know what the impact is going to be on our budget with having another medical
• But I'm just wanting to know what the impact is going to be on our budget with having another medical
• Inflation, as we look at the numbers from '21 to '24, 16 percent on average.

Bills: HB42 , HB 125 , HB 1233 , HB2853 , HB3148 , HB3326 , HB3701 , HB4066 , HB4361 , HB4762 , HB4909 , HB4912 , HB42 , HB125

Committee: House Higher Education

Keywords: higher education, funding, financial allocation, state budget, Texas A&M University, University of Houston, education funding, medical education, osteopathic medicine, healthcare workforce, Tarleton State University, industry-recognized credentials, workforce development, career opportunities, feasibility study, student fees, university funding, student union, education, UT El Paso

Summary: The Committee on Higher Education met to hear several bills and first corrected the minutes from its April 1, 2025 meeting to reflect that a committee substitute for HB 271 had been adopted before the bill was reported favorably. The committee then heard HB 3326, which would help Texas higher education employees, especially adjunct faculty, qualify for federal Public Service Loan Forgiveness by counting classroom hours toward full-time status, requiring institutions to verify employment within 60 days, and requiring annual notice to eligible employees. No witnesses testified against the bill, and it was left pending. Members then heard HB 2853, authorizing UTEP to phase in a student union fee increase to fund demolition and reconstruction of its aging student union. Representative Perez and UTEP student and university witnesses said the current facility is outdated and insufficient for a campus of more than 25,000 students, while some members raised concerns about the size of the fee increase and its impact on low-income students. UTEP representatives said most students receive aid, the fee would be phased in over time, and the project was student-approved; the bill was left pending. The committee also heard HB 4066, a one-line bill to abolish the Texas Research Incentive Program after the state cleared its backlog of matching obligations, with the author saying the program was no longer needed in light of newer research funding approaches. The bill was left pending. The committee spent substantial time on HB 125, which would create the Tarleton State University College of Osteopathic Medicine. Supporters, including Tarleton leadership, the founding dean, a rural hospital CEO, and a feasibility consultant, argued the school would address severe rural physician shortages by recruiting Texas and rural students, training them in rural settings, and developing new residency slots rather than competing for existing ones. Members asked about affordability, residency placement, and whether the school would draw students from rural Texas; Tarleton said it would seek to keep tuition and debt low, had already raised private donations, and would request $25 million in state support over the biennium. The bill was left pending. Finally, the committee heard HB 42, which would increase the annual Higher Education Fund appropriation and adjust its allocation methodology. The chair and university witnesses described rising deferred maintenance, inflation, cybersecurity needs, and enrollment growth at HEAF-eligible institutions, with witnesses from Texas Tech, Sam Houston State, and UNT saying the additional funding would help address aging facilities and technology needs. After testimony, the committee left HB 42 pending and recessed.

Transcript Highlights:

• So increasing costs, even by just a little bit, have big impacts much bigger than a stat or graph will
• There are certainly limits to that, and rates have an important impact on that.
• </c> we saw um rates have an important impact we saw um rates have an important impact on<00:41:16.319
• </c><00:41:52.319><c> the</c> for customers without impacting the for customers without impacting the
• </c> Energy prices to the overall inflation Energy prices to the overall inflation rate<01:08:34.040>

Committee: Senate Energy, Utilities, Environment, and Climate

Transcript Highlights:

• </c> blue um where State policies um impact blue um where State policies um impact uh<00:32:37.159><c
• We contribute to the evaluations as such. health impacts of the proposed health impacts of the proposed
• In 2020, national health spending was $4.6 trillion, adjusted for inflation.
• </c> mobility and all of this impacts mobility and all of this impacts People's<01:24:02.560><c> Health
• </c><01:26:28.719><c> my</c> to know if something that impacts my to know if something that impacts my

Committee: House Commerce Finance and Policy

Transcript Highlights:

• These differences are also impacted by three governance challenges.
• Since then, we're seeing 4% inflation.
• So the question is going to be: what's our impact?
• ...to there and not consider inflation or anything else.
• The inflation, yeah, I'll probably agree that's a little bit of a shortfall.

Summary: The Water Topics Overview Committee met with a quorum and received updates from the Department of Water Resources and the State Water Commission, followed by presentations from Deloitte on two legislative studies required by House Bill 1020. Director Reese Haas reviewed major project and budget updates, including the Northwest Area Water Supply and Southwest Pipeline projects, Resources Trust Fund balances, carryover spending, project prioritization, bid conditions, regional water system coverage, and department process improvements. Members also discussed how the commission prioritizes projects, maintenance expectations, and the impact of limited municipal water supply funding. No formal committee action was taken during the DWR update; the commission’s municipal funding decisions were described as pending its April 8 meeting. Deloitte then presented the cost-share policy study, which found that under current policy and forecasted revenues, North Dakota faces an estimated $1.3 billion shortfall over 14 years, with a near-term gap of about $1.8 billion through 2031. The firm outlined seven recommended options, including tighter definitions and a 25% cost share for eligible replacement projects, caps and financing strategies for the Mouse River and Red River Valley projects, aligning cost share with commission priority guidance, delaying lower-priority projects, using available lines of credit, and adjusting reimbursement timing for revolving loan funds. Committee members questioned inflation assumptions, affordability, user fees, and the use of legacy fund earnings for bonding, but no decisions were made. In the governance and finance study, Deloitte said final recommendations are still being refined, with a final report due May 29. The study examined the Southwest Pipeline, NAWS, and Red River Valley systems using governance and finance criteria such as decision authority, transparency, affordability, risk, and access to funding. For Southwest, Deloitte outlined options ranging from improved state-authority coordination to transferring ownership to the Southwest Water Authority; for NAWS, options focused on strengthening the authority’s role and potentially transitioning operations and maintenance; and for Red River, options ranged from enhanced facilitation to formal state oversight or state ownership. Members asked follow-up questions about ownership transfer, capital repayment streams, and why NAWS was not considered for transfer, and Deloitte said NAWS’s limited organizational maturity made that option less viable in the near term.

Transcript Highlights:

• “And then can you explain what is contract inflation?” “Go ahead, Ms. Williamson.” “Thank you, Mr.
• Contract inflation.
• So anything that you see in that contract inflation category in the budget book is typically really..
• Higher than the 77% of enhanced and 94.8% for basic, and have exceeded inflation, exceeded inflation.
• the expansion population but some of them also impact others in the Medicaid program.

Summary: The committee heard a budget presentation on the Division of Medicaid within the Department of Health and Welfare, including an overview of the division’s five programs, staffing, spending trends, and the large share of the budget that goes to trust and benefit payments. Ms. Williamson explained the difference between ongoing and one-time enhancements, the role of population forecast adjustments, and why the fiscal year 2026 and 2027 numbers change significantly. Members asked about the growth in the budget, the FMAP match rate, the impact of provider rate changes, and the shift of some positions into Medicaid from other divisions after last year’s reorganization. A major topic was House Bill 345 and related budget changes, including the hospital assessment fund alignment, the 4% provider rate reduction, and the effect on Medicaid expansion and other populations. The committee discussed the decline in expansion enrollment, rising costs in traditional Medicaid populations, and the governor’s recommendation to offset part of the 2027 increase with additional reductions. Members raised concerns about access to care, especially for dental, behavioral health, developmental disability, and home- and community-based services, while the deputy director said the department is trying to contain costs through prior authorization, fraud and abuse work, and policy changes. The committee also focused on the MMIS replacement project, which is in year four of a five-year procurement and is funded through dedicated and federal dollars tied to milestones. Another significant item was estate recovery, where the department requested funding to replace an outdated case management system and add contractor support to address a backlog of roughly 20,000 cases; members questioned the return on investment and asked for more detail on the software and staffing split. The deputy director also explained the federally qualified health center reconciliation issue, saying the state had not been properly paying change-in-scope amounts and is now using a new process with interim payments and later reconciliation. In addition, lawmakers asked about program integrity staffing, the use of AI, and whether the department could better target fraud, waste, and abuse investigations. The deputy director said the department is reviewing AI use cautiously and sees opportunities for it in claims review and anomaly detection, but emphasized that the current request is for dedicated receipt authority rather than general funds. No formal votes were taken in the excerpt, but the committee received the presentation, asked extensive questions, and was told that some follow-up information would be provided later.