Transcript Highlights:

• of inflation.
• </c><00:02:50.480><c> of</c> because of the impact of because of the impact of inflation<00:02:52.159
• </c><00:03:12.480><c> introduce</c> changes and uh their impacts introduce changes and uh their impacts
• the totals discretionary inflation the totals discretionary inflation consists<00:04:11.959><c> of</
• </c> of the cost of discretionary inflation of the cost of discretionary inflation to<00:04:43.039><c

Committee: Senate Finance

Transcript Highlights:

• inflation.
• inflation.
• inflation.
• inflation.
• What do you see the impact be of the proposed tariffs on the indicators and inflation that you presented

Summary: The meeting was a Ways and Means briefing opened by the vice chair, who introduced Jason Wong of the Federal Home Loan Bank of Boston to discuss the national and regional economy. Wong focused on inflation, asking why it had fallen from about 9% in 2022 to the 2%–3% range, and what that meant for monetary policy and the risk of an economic downturn. He said the Fed’s target is 2%, noted that recent PCE inflation was about 2.4% and core PCE about 2.7%, and described the ongoing debate over whether interest rates should stay tight or be lowered further to protect the labor market. Wong explained that the improvement in inflation has been driven largely by goods prices, especially durable goods such as cars, appliances, and furniture, as well as non-durable goods like food. He said supply-chain disruptions during the pandemic caused major price spikes in 2022, but those pressures have eased and many goods prices are now at or below the Fed’s target. He also referenced the New York Fed’s Global Supply Chain Pressure Index, saying it showed extreme pandemic-era disruptions that have since receded. The main remaining inflation problem, he said, is in services, especially housing. Wong broke services into rent of shelter and all other services, explaining that shelter is a large share of household budgets and that housing inflation has a lag because rent measures often reflect older lease terms rather than current market rents. He said monthly Zillow data suggest market rents have cooled and may eventually feed through to official inflation measures. Members asked several questions about the chart’s time scale, the treatment of real estate, property taxes, and utilities, and Wong clarified that housing costs are counted in services and that the slides would be shared digitally. No votes or formal actions were taken.

Transcript Highlights:

• On the inflation front, Inflation is down from the mid-2020 peak.
• But inflation has been sticky.
• And then if we do start to accelerate, having a tight labor market really impacted the inflation figures
• When we have a tight labor market and people are competing for workers, it really impacts inflation.
• The wage inflation affects overall inflation.

Summary: At the April meeting of the Finance Advisory Committee, staff presented an updated state revenue forecast that was more cautious than January’s because of heightened economic uncertainty tied to the Iran conflict and broader national risks. The general fund’s available resources were revised down from $577 million in January to $378 million in the April forecast, with the lower estimate driven by reduced revenue projections while spending assumptions were unchanged. Staff said the outlook depends heavily on how long the Middle East conflict lasts and noted that a prolonged disruption could weaken the forecast further, while a quick resolution could improve conditions. George Hammond of the University of Arizona gave a broad economic overview, highlighting geopolitical risk, elevated oil and gasoline prices, sticky inflation, weak Arizona job growth, and uncertainty around federal policy, tariffs, immigration, and AI-related investment. He said Arizona’s recent job growth has been very weak and concentrated mainly in health services, while most other sectors lost jobs, and he attributed much of the slowdown to low hiring rather than layoffs. He also discussed population growth, noting that Arizona remains above the national average but is increasingly dependent on net migration as natural increase slows, and he warned that housing affordability remains strained even as Phoenix inflation has moderated. Panelists generally echoed the cautious outlook but pointed to some offsets. Liz St. Clair said Arizona’s near-term revenues could benefit from tourism tied to spring training and the Final Four, though higher fuel costs could dampen discretionary spending. Other panelists noted that the federal policy environment, tariffs, and immigration changes are likely to restrain growth, while productivity gains, especially from technology and AI, may help businesses maintain output. Several members also discussed housing, saying single-family permits have fallen while rental supply has improved affordability, and they raised concerns about labor-force growth, wage disparities, and the reliability of recent employment data revisions. No formal votes or actions were taken.

Transcript Highlights:

• of inflation.
• impact of inflation while because of the impact of inflation while individual<00:02:29.440><c> income
• </c><00:06:39.039><c> on</c><00:06:39.120><c> the</c> impacts of will have impacts on the impacts of
• A significant driver of this change is the impact of inflation on the basic formula.
• of inflation on the change is the impact of inflation on the basic basic basic formula<00:28:51.559>

Transcript Highlights:

• Let's look at the impact of fossil fuels on inflation.
• Let's look at the impact of fossil fuels on inflation.
• Let's look at the impact of fossil fuels on inflation.
• Let's look at the impact of fossil fuels on inflation.
• Let's look at the impact of fossil fuels on inflation.

Transcript Highlights:

• PCE inflation prices.
• One of the things that has also impacted consumers is inflation.
• that has on inflation and prices.
• as we've been trying to manage inflation.
• It's just another reminder of how much people hate inflation and how bad high inflation is for people

Bills: SB257

Committee: Senate Banking, Housing, and Urban Affairs Committee

Transcript Highlights:

• </c> biennia ago to forecast for inflation. biennia ago to forecast for inflation.
• </c> its impact monetarily. its impact monetarily.
• What I said was the direction was given to MMB to figure out how to forecast the impact of inflation.
• And you also you talk about inflation inflation inflation forecasting<00:31:38.480><c> inflation.
• Well, inflation forecasting inflation.

Transcript Highlights:

• This lack of clarity is having an impact on our climate goals.
• Um, what is an inflation-constrained scenario?
• Here's my inflation-constrained scenario.
• Here's my inflation-constrained scenario.
• Here's my inflation-constrained scenario.

Summary: The Assembly Committee on Utilities and Energy heard several bills focused on clean energy, electrification, and grid planning. AB 1813 (Ward) would revise California’s community renewable energy program to better support community solar and storage, especially for renters and low-income customers, by tying credits to avoided costs and requiring at least 51% low-income participation. Supporters said the current CPUC program is unworkable and has stalled development; utilities raised concerns about cost shifts, CCA impacts, and the bill’s late substantive amendments. The bill was discussed but no vote was recorded in the excerpt. AB 2313 (Berman) would create a gas service line replacement alternative program allowing customers facing planned gas line replacement to instead choose electrification and receive an incentive. Supporters argued it would reduce long-term gas infrastructure costs and give customers more choice, while opponents warned it could divert money from safety-related gas replacement work, create affordability issues, and conflict with the recently approved SB 1221 pilot. Committee members pressed the author on safety, funding sources, and renter impacts; the author said the bill includes emergency replacement exemptions and is intended to lower costs for remaining ratepayers. AB 1975 (Schultz) would require the CPUC to develop a grid utilization metric and consider expanded grid management programs to better use existing distribution infrastructure and reduce the need for costly upgrades. Supporters said better utilization could save ratepayers billions and help integrate batteries and flexible load; utilities generally opposed rigid utilization targets but were open to further discussion. The committee passed AB 1975 on a 7-0 vote to Appropriations. AB 2612, on plug-in photovoltaic systems, passed 9-0 to Appropriations after supporters said it would expand access to low-cost solar and utilities requested clarification that they would participate in the standards process. AB 1849 (Pappin) would direct CARB to study the need for decarbonized gaseous fuels in hard-to-electrify sectors and for grid reliability. Supporters framed it as a technology-neutral assessment for sectors like industrial heat and backup power; opponents argued it was biased toward a preferred fuel pathway and duplicated existing state studies. After a lengthy exchange over the lack of a statutory definition for “decarbonized gaseous fuels,” the bill passed 10-0 to Appropriations. AB 2088 (Pappin) would authorize investor-owned utilities to own and operate thermal energy networks, with safeguards for safety, workforce, and ratepayers. Supporters described TENs as efficient, low-emission heating and cooling systems that can use geothermal energy or waste heat; the bill passed 9-0 to Appropriations.

Transcript Highlights:

• ,</c> we don't count discretionary inflation, we don't count discretionary inflation, which<00:06:57.840
• </c><00:21:44.159><c> because</c> have a large budgetary impact because have a large budgetary impact
• </c> process, claims for the impacted process, claims for the impacted benefits<00:27:08.720><c> are<
• </c> include discretionary inflation. include discretionary inflation.
• </c> forecast impact be there? forecast impact be there?

Summary: Minnesota Management and Budget officials presented the February 2026 budget and economic forecast, saying the state remains in a strong financial position but faces continued structural imbalance and significant uncertainty. Commissioner Aaron Campbell said the FY 2026-27 balance is now projected at more than $3.7 billion, up about $1.3 billion from November, and the FY 2028-29 planning period is projected to end with a $377 million positive balance. He emphasized that the improvement comes largely from higher projected revenues, especially individual income and corporate franchise taxes, but warned that the state is increasingly reliant on more volatile sources such as capital gains, interest income, and corporate profits. State Economist Dr. Anthony Becker said the national outlook improved slightly, with stronger projected GDP, consumer spending, and investment, but weaker payroll growth and ongoing trade-policy uncertainty. He noted that the forecast was complicated by missing federal data because of the federal shutdown, and that tariffs, immigration policy, equity markets, and possible AI-related shifts all present risks. Revenue projections were raised for the current biennium, including individual income tax receipts, sales tax revenue, corporate franchise tax revenue, and other revenues, while Becker stressed that federal funding threats, especially involving Medicaid and other entitlement programs, could materially alter the outlook. State Budget Director Anna Mingi said general fund spending in the current biennium is projected to be $68 million lower than previously estimated, but planning-year spending is up $152 million. The biggest spending changes came from education, where special education costs rose sharply after updated local spending data, and from human services, where a new prepayment review process for certain Medicaid benefits reduced projected spending by $133 million this biennium and $105 million in the next. She also said discretionary inflation is now estimated at $1.04 billion, up $104 million from November. Campbell closed by saying the state’s reserve remains at a record $3.8 billion and that Minnesota’s AAA bond rating and reserve policy help protect against downturns. He cautioned, however, that the long-term structural imbalance remains about $3.4 billion in the planning years, or $2.3 billion excluding discretionary inflation, and urged policymakers to offset any new spending with reductions. No votes or formal actions were taken; the meeting was a presentation and question-and-answer session on the forecast.

Transcript Highlights:

• So, and that's how you fight medical inflation, again, medical inflation is going to occur.
• From how you fight medical inflation, again, medical inflation is going to occur.
• And the medical inflation is what, 8, 9%?
• You mentioned some things about medical inflation. There are a lot of drivers of medical inflation.
• Those things are going to drive medical inflation.

Bills: SB2160

Committee: House Industry, Business and Labor

Summary: The committee resumed work on Senate Bill 2160, which would move the Public Employees Retirement System health plan from grandfathered to non-grandfathered status under the Affordable Care Act. PERS officials Rebecca Frickie and Derek Holbein explained that the bill would allow more flexibility in plan design, including higher deductibles, co-pays, and out-of-pocket maximums, while also adding enhanced preventive benefits. They clarified that ACA “essential health benefits” apply to individual and small-group markets, not to PERS as a large employer, and that the bill’s projected cost increases were based on actuarial estimates and prior bid scenarios from Sanford and Blue Cross Blue Shield. Members debated whether the bill would actually save money or simply shift costs to employees. Supporters argued that non-grandfathered status would create more levers to manage medical inflation and could produce net premium savings through plan redesign, citing prior bid comparisons showing potential reductions of 1% to 8% depending on the option. Opponents, including Representative Schauer and North Dakota United president Nick Archelette, questioned how the state would pay for the estimated $25 million to $30 million in added benefits and warned that employees could face higher out-of-pocket costs amid already strained household budgets. Frickie said the legislature would control funding decisions and that current law requiring the state to pay full family premiums could be changed only by statute. The committee also discussed reserve funding, with members noting that a $4.3 million reserve draw in the bill was intended to cover the final months of the biennium and could be modified. After testimony and discussion, Vice Chair Johnson moved a do-pass recommendation and referral to Appropriations. The motion passed 10-3-1, with Representatives Ostlie, Schatz, and Schauer voting no. Representative Gump agreed to carry the bill.

Transcript Highlights:

• And it's not going to impact—eventually it won't impact population.
• This bill, if applied to ESDs, would not just impact budgets; it would impact lives.
• Not just kind of typical inflation, which also has an impact for all of us, but there are some unique
• Inflation leading up to that... ...had been at a decade of 2% to 3% inflation rate.
• Inflation got way out of control.

Bills: HB17 , HB23 , SB 10

Committee: House Ways & Means

Transcript Highlights:

• of lower inflation, and then an even shorter period of even lower inflation, and then a tick back up
• So, a very large generation that had a very strong impact on the economy, a deflationary impact on the
• push down interest rates and inflation.
• seen in interest rates and inflation.
• inflation went down.

Committee: House Investments & Pensions Oversight Committee

Transcript Highlights:

• And that is without inflation.
• Or, and that is with inflation factored in, without inflation factored in, the balance is -2.39379 billion
• </c> inflation or and that is with inflation inflation or and that is with inflation factored<00:04:16.720
• factored in without inflation factored factored in without inflation factored in<00:04:19.919><c> uh
• </c> 2% it will at least be 2% if inflation 2% it will at least be 2% if inflation is<00:08:22.199><c

Committee: House Education Finance

Transcript Highlights:

• :06:44.760><c> in</c> Discretionary inflation is included in Discretionary inflation is included in the
• Now, for inflation, compared to the November forecast, inflation is projected to be slightly lower in
• </c> impact to the state. impact to the state.
• </c> discretionary inflation. discretionary inflation.
• </c> the impact of a fraud on the forecast. the impact of a fraud on the forecast.

Committee: Senate Finance

Transcript Highlights:

• If we do get that higher productivity, that could possibly impact inflation. You know, we...
• If we do get that higher productivity, that could possibly impact inflation.
• We had really fast wage increases that impacted inflation.
• We haven't hit the full impact of tariffs on inflation, which means we might have some upward pressure
• We haven't hit the full impact of tariffs on inflation, which means we might have some upward pressure

Summary: The Finance Advisory Committee met for its January session to review Arizona revenue and economic conditions ahead of the budget process. JLBC staff presented the January baseline, noting projected positive cash balances through FY 2029 and about $577 million to $578 million in discretionary capacity, but also highlighting major unfunded items not included in the baseline, including federal tax conformity costs, ongoing one-time spending for state employee health insurance and school facility repairs, and administrative costs tied to H.R. 1. Staff also reviewed revenue trends by category, saying FY26 general fund revenues were running above forecast overall, with strength in retail, restaurants and bars, and individual income tax payments, while contracting and utility-related collections were weaker or flat. They also compared JLBC and executive revenue assumptions and discussed the executive’s proposed revenue changes, including border reimbursement assumptions, sports betting tax changes, data center-related tax and fee proposals, and other non-general fund measures. A major topic was income tax conformity with recent federal tax law changes. Staff explained that current Department of Revenue forms assume “straight conformity,” but the governor’s proposal and vetoed SB 1106 do not fully match those forms, creating possible amendment and timing issues for taxpayers and the department if the legislature adopts a different policy. Members also discussed the difficulty of forecasting revenues amid volatile monthly collections and uncertainty over how much of the current revenue strength will persist in the second half of the fiscal year. Danny Court of Elliott Pollack gave a broader national and state economic outlook, arguing that the U.S. has avoided recession despite several warning indicators, largely because of AI and data center investment, while employment growth has softened and inflation remains above the Fed’s target. He said Arizona remains relatively resilient, with strong population and job pipelines, but faces housing affordability constraints, slowing employment growth, and a more concentrated population forecast in the Phoenix area. Panelists generally agreed that Arizona remains in better shape than many states, though they cautioned that job growth is slowing, population estimates may be revised, and budget and revenue forecasts should be treated carefully given uncertainty in the data. No votes or formal actions were taken.

Transcript Highlights:

• </c><00:03:57.400><c> of</c> starting to see the negative impacts of starting to see the negative impacts
• </c><00:04:05.519><c> and</c> tariffs and uh increasing inflation and tariffs and uh increasing inflation
• If we look out in the out years and we use the non-inflation-adjusted numbers, or the inflation-adjusted
• </c><00:10:27.399><c> adding</c><00:10:27.839><c> inflation</c> keep up with inflation adding inflation
• keep up with inflation adding inflation to<00:10:28.519><c> the</c><00:10:28.640><c> general</c><00:

Transcript Highlights:

• </c> impacts of the bill. impacts of the bill. House<00:07:48.200><c> Fiscal.</c> House Fiscal.
• </c> The most significant and ongoing impact The most significant and ongoing impact of<00:47:17.600>
• </c> funds create a direct budgetary impact funds create a direct budgetary impact to<00:49:45.120><c
• </c> would impact capital gains very quickly. would impact capital gains very quickly.
• That was the impact of the TCJA.

Bills: HF3425

Committee: House Ways and Means

Transcript Highlights:

• The primary cost factors were record inflation, even higher inflation for building materials, and more
• Real question is if you look at the impacts of COVID-19 pandemic inflation rising input costs and legal
• Of that, you see a couple percent from general inflation, you see additional building inflation that's
• And then the building material inflation has outpaced the underlying inflation, and then you add into
• And that will impact our local budgets.

Committee: Senate Banking, Housing, and Urban Affairs Committee

Keywords: homeowners insurance, natural disasters, insurance costs, climate change, disaster preparedness, federal policies, bipartisan solutions

Summary: The meeting reviewed critical issues surrounding the rising costs and accessibility of homeowners insurance across the United States, particularly in light of increasing natural disasters linked to climate change. Members engaged in extensive discussions regarding the implications for families and the economy, citing significant increases in premiums and decreasing availability of policies in high-risk areas. Supervisor Peysko highlighted the direct impact of federal policies on local communities, emphasizing the growing burden on homeowners as they face skyrocketing insurance costs amidst a backdrop of environmental challenges and regulatory constraints. The committee expressed a unified call to action for bipartisan solutions, focusing on improving building codes and enhancing disaster preparedness measures.

Transcript Highlights:

• This lack of clarity is having an impact on our climate goals.
• Um, what is an inflation-constrained scenario?
• What is an inflation-constrained scenario?
• Here's my inflation-constrained scenario.
• And I don't think that it has any impact on wage negotiations.

Committee: House Utilities and Energy

Transcript Highlights:

• There are also schedule extension impacts.
• And it's not just due to inflationary impacts.
• So already there was an allowance for inflation.
• And there has been an acceleration of inflation. Inflation has been higher than ODOT forecast.
• So that was a decision that had a material impact on the costs, and it had a material impact, as Mayor

Summary: The committee first received an informational update on the Interstate Bridge Replacement Project from Carly Francis and Travis Brower. They described the project’s purpose as improving seismic resilience, safety, freight movement, transit, and bicycle/pedestrian access across the Columbia River, and said the updated cost estimate is $13.2 billion to $14.4 billion for the full corridor. They explained the increase from the 2022 estimate as driven by construction inflation, a more conservative inflation curve, schedule delays, more detailed engineering, and risk modeling. They also outlined the funding plan, including $2.1 billion in federal funds, $1 billion each from Oregon and Washington, and $1.5 billion in projected toll revenue, and said they are working to obligate federal funds by the end of September. The panel described a first funded phase that would include the bridge, highway connections, tolling infrastructure, bridge removal, and transit design, with light rail to Vancouver still intended but dependent on additional funding. Members questioned the risk of losing federal transit funds, whether bridge design decisions were being made with legislative input, and whether the space reserved for light rail could be used for buses if transit funding does not materialize. The committee then heard testimony on maintaining Oregon’s existing roads and bridges from representatives of Knife River, the Asphalt Pavement Association of Oregon, and CRH. Witnesses said pavement and bridge preservation is severely underfunded, with ODOT needing about $400 million per year for pavement preservation but receiving roughly $100 million annually. They showed examples of deteriorating highways such as U.S. 97 and I-84 and argued that delaying maintenance leads to much higher reconstruction costs, more safety risks, and higher user costs. Knife River described layoffs and reduced work in Oregon because of limited preservation funding, while witnesses also said rising wages, equipment costs, fuel, and permitting delays are increasing project costs. Committee members asked about the role of prevailing wage, diesel equipment, hauling distances, and whether preservation work could be prioritized more effectively. Finally, economist Joe Cortright presented on recent ODOT megaproject cost overruns. He said Oregon has experienced persistent overruns driven by overly optimistic revenue forecasts, heavy reliance on debt, consultant costs, inflation above forecast, and projects that have become much larger in scope than originally presented. He cited major increases in the Interstate Bridge, Rose Quarter, and Abernathy Bridge projects and argued that some designs are far wider and more expensive than necessary. Cortright said better accountability, clearer priorities, and more disciplined project sizing are needed, and committee members pressed him on why agencies proceed with larger designs even when consultants recommend narrower, less expensive alternatives.