Ways and Means panel adopts conservative revenue estimates for 2025–27 and finalizes tax-category figures

The House Ways and Means Committee on Feb. 11 set its revenue estimates for key tax categories covering fiscal years 2025–27, adopting conservative, middle-ground figures and a handful of agency-provided projections for the fiscal-plan documents the committee will send forward.

Committee members focused on the gross receipts first and then discussed the transfers that reduce amounts available to the General Fund — notably municipal transfers and school-building aid for meals-and-rooms receipts and statutory transfers tied to business taxes. Chris, a Department of Revenue Administration analyst, summarized the spreadsheets and the DRA calculations that convert gross figures into net amounts available to the General Fund and the Education Trust Fund, saying the documents “take the numbers that were provided for ’25, the low and the high, and then it takes the percentages that were offered… and applies it to those.”

Why it matters: The committee’s choices will be rolled into a resolution and presented to the full House; small differences in percentage points in these categories change the sums available for state programs and local transfers during a two-year budgeting window.

What the committee decided (highlights) - Insurance tax (column F): The committee voted to accept the DRA-provided estimates for fiscal 2025 (column F). Representative Almi moved the motion and Representative Buhlery seconded it; the clerk recorded the vote as 16–0 in favor. Members discussed an insurance-commissioner email confirming that the department factors disasters and global events into premium estimates; one committee member said the short answer to two DRA questions was “yes and yes.” - Utility property tax: After a discussion about how DRA assesses utility property and the potential effect of energy, steel and aluminum tariffs, the committee agreed to use the average of the high and low DRA estimates for FY25–27 (roughly $45.2M for FY25, $45.09M for FY26 and $46.6M for FY27 in the worksheet). Representative Tierney moved the numbers; members voiced support for using averages because DRA’s CAFR and assessment history indicate relatively modest near-term swings. - Real estate transfer tax: Members endorsed averages for FY25–27 (committee cited the register-of-deeds consultations and DRA input). Representative Breyer moved the motion and Representative Ami seconded; the roll call was recorded as 17–0. - Communications tax: Members approved using the averages, with one adjustment: when an average landed on a .5 the committee elected to round down (for example, taking 29.6 to 29.5 in the FY25 slot). A motion to use averages with the specified rounding carried. - Interest and dividends: The committee accepted the DRA numbers showing a drop in interest/dividend receipts over the period as tax-year timing effects diminish; members noted the FY25 number still reflects carryover from 2024 returns. The motion to accept the DRA numbers carried without opposition. - Tobacco: The committee debated long-term consumption trends, border effects and non-cigarette alternatives; they settled on an adjusted average (committee discussion produced an adopted figure of $183.5M for FY25 after subtracting 0.5 from the straight mean, with FY26 and FY27 similarly adjusted) and approved the motion. - Meals and rooms: Committee members discussed gross vs. net calculations (gross receipts must be computed before municipal and school-building transfers are removed). Using DRA’s gross averages, the committee approved gross estimates of $477.1M (FY25), $493.9M (FY26) and $511.3M (FY27); Chris showed the worksheet that converts those to net General Fund numbers after the municipal and school-building deductions. - Business taxes: After reviewing a DRA refund analysis and a separate refunds-and-returns worksheet, the committee adopted a conservative series of growth assumptions: the committee set the business-tax estimates at approximately 1.03 (FY25), 1.06 (FY26) and 1.10 (FY27) on the worksheet’s baseline (rounded in the materials as $1,030M, $1,060M and $1,102M on the committee sheet). Members emphasized that refunds and carryovers from prior years have driven recent volatility and that taxpayers have been “rightsizing” estimates; the motion to accept the numbers passed on a recorded vote.

Budgetary mechanics and next steps Committee staff and DRA emphasized the two-step process: first set gross receipts and growth assumptions, then let staff compute deductions (municipal transfers, school-building aid and other statutorily required removals) to produce net estimates for the General Fund and the Education Trust Fund. Chris told members he would prepare a final worksheet with the splits and “create the resolution” for committee review. The chair said the committee will take a final vote on a formal resolution at a later work session; the committee scheduled follow-up work and a tentative resolution vote for the week of Feb. 19.

What members raised but did not decide - Several members pressed DRA for more detail on assessment timing for utilities and how depreciation and asset appraisals are incorporated; DRA noted appraisals vary by property and are performed at different times of year. - Members repeatedly noted that short-term variation in refunds and taxpayer overpayments has driven recent volatility in business tax cash flow; DRA cautioned the committee that refunds would likely decline over the horizon but not disappear.

Ending note: Committee members asked staff to circulate the final two-sided business-tax analysis and the refund schedule; Chris provided the materials at 1:01 p.m. and committed to circulating the worksheet the committee will use to draft the resolution.