Legislative budget office and Department of Revenue brief Ways and Means on unrestricted revenue estimating process

Chris Shea of the Legislative Budget Assistance office told the House Ways and Means Committee the panel’s charge is to produce unrestricted revenue estimates for the General Fund (including the Education Trust Fund), the Highway Fund and the Fish and Game Fund.

The estimates, Shea said, reflect collections under current law; changes enacted later in the session are tracked separately on a surplus statement and netted against the committee’s figures. He described the office’s worksheet and schedule process, how agency estimates feed the committee spreadsheets, and how committee numbers are memorialized in a resolution for the House floor and as an amendment to House Bill 1 (the operating budget).

Lindsey Stepp, Commissioner of the Department of Revenue Administration (DRA), gave a technical briefing on the large tax accounts the committee will estimate. She outlined DRA responsibilities and timetables for filings and collections, explained how calendar-year business tax filings map into the state fiscal year, and emphasized that estimated payments make up a large portion of business-tax receipts while final returns and extension payments drive later-year adjustments.

Both offices described the monthly “revenue focus” report the Department of Administrative Services issues and the state’s revenue information management system (RIMS/Gentax), which DRA said has improved collections and compliance. Commissioner Stepp noted that RIMS and related process changes generated additional collections last year, a portion of which are statutorily transferred to pay RIMS-related debt service.

On recent trends, DRA and LBA staff told the committee: - Business taxes (BPT and BET combined) expanded significantly in the 2020–2023 period, then softened in 2024–25 as estimated payments declined and DRA’s newer filings and apportionment practices changed reported flows. DRA said taxpayers’ changing estimated-payment behavior is a major factor in the slower growth. - Meals-and-rooms revenue continues to be concentrated in a few counties and months; the statute now directs a municipal revenue transfer (30% of net M&R from the most recently completed fiscal year) and DRA explained that transfer affects year‑over‑year general‑fund comparisons. - Tobacco receipts moved during the pandemic, with electronic cigarette receipts growing since a 2020 tax on e‑liquids; DRA reported increased seizures of untaxed imported e‑liquid products that are being handled as contraband for tax purposes.

Stepp and Shea described the scenarios the committees will use to set the official estimate: starting points include the current fiscal-year plan, sustaining year‑to‑date differences vs. plan and versus prior year, and scenario ranges that produce realistic high/low estimates for the rest of the year. They stressed estimates must be based on current law and that surplus-statement adjustments will record the fiscal effect of bills the House later passes.

The presentation closed with logistics for the committee’s upcoming revenue work sessions, and a reminder that DRA and LBA will post documents and recordings on their websites for members.