Appropriations Committee adopts 2025–27 base revenue forecast; motion carries

The Senate Appropriations Committee on Tuesday morning voted to adopt a base revenue forecast that will be used to begin development of the 2025–27 budget and for the committee's budget status reports.

The motion — moved by Senator Sorvaugh and seconded by Senator Deaver — carried on a recorded voice vote in which 16 members answered “Aye.” The committee chair said the forecast will be updated in March with more current information before the budget is finalized.

The adopted proposal combines two consultant forecasts for the four major taxes (sales, motor vehicle excise, individual and corporate income taxes) by splitting the difference between the Armstrong (executive) and S&P estimates; other tax types generally follow the Armstrong recommendation. Alan Knudson of the Legislative Council staff told the committee, “this really is a starting point for your beginning development of the 25‑27 budget is to adopt a base level revenue forecast.”

The committee's proposed forecast shows roughly a $77,000,000 increase for the 2025–27 biennium compared with the Armstrong executive forecast for the same major tax types. Knudson also noted several executive‑budget adjustments that are reflected for comparability only: Governor Armstrong recommended increasing oil and gas tax allocation to the general fund from $460,000,000 to $500,000,000 and shifting some legacy fund earnings into a special property tax relief fund; those governor proposals would require legislation before taking effect and are not assumed in the committee's base forecast.

Committee staff explained the forecast's treatment of energy taxation: the forecast shows restoration of previously exempted coal conversion taxes beginning in 2026 and estimates about $21,350,000 in additional general‑fund revenue from that change if the exemption lapses. For the beginning general‑fund balance on July 1, 2025, the committee's proposed starting balance is $1,112,000,000, up from the starting number shown in the Armstrong materials ($865,800,000) after accounting for forecast adjustments and estimated agency turnbacks.

On oil price and production assumptions, the committee kept the same figures used in the Armstrong forecast for the committee's baseline: a $62 per‑barrel price and production of 1,150,000 barrels per day for the remainder of the current biennium, with a modest decline to $60 and 1,100,000 barrels per day in 2025–27. Knudson explained that those oil assumptions come from the state's Revenue Advisory Committee and are adopted into the executive recommendations for both the prior and current governors.

The committee also reviewed recent collections and interest income that affect the forecast: actual collections through November were roughly $400,000,000 above forecasted levels, and staff assumed about $100,000,000 more for the remainder of the biennium. Interest income for the current biennium has been unusually high — roughly $135,000,000 in one interest line and $103,000,000 from the budget stabilization fund — and staff projected smaller interest receipts for 2025–27.

The committee adopted the forecast to serve as the baseline for the budget status report that staff will run later this week and will revisit revenues in the March update.

Votes at a glance: Motion to adopt the revenue forecast (page 3 of the motion document). Motion by Senator Sorvaugh; second by Senator Deaver. Recorded affirmative votes: Senator Burghard; Senator Beckettall; Senator Erbele; Senator Cleary; Senator Conley; Senator Davidson; Senator Deaver; Senator Dwyer; Senator Magram; Senator Matherne; Senator Meyer; Senator Shibley; Senator Sickler; Senator Sorvaugh; Senator Thomas; Senator Wanzick. Outcome: approved.