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JFAC briefed on sales-tax distributions, growth of tax relief fund and implications for general fund flexibility
Summary
Budget staff reviewed how sales tax collections are distributed (including revenue sharing and the tax relief fund), projected sales tax totals through FY2026, and the possible effect of proposals to earmark additional sales-tax dollars for a Techum bond program.
Budget staff walked JFAC through the mechanics of sales tax distributions, recent growth in earmarked funds and how that reduces the portion of sales tax left to the general fund.
Key points and numbers: Keith Bybee told the committee gross sales tax collections were about $3.1 billion in 2024, projected to $3.37 billion in 2025 and $3.5 billion in 2026. After refunds and statutory transfers (including the transfer that funds the tax relief fund), net collections are reduced before the statutory distribution formula applies. Revenue sharing to local units equals 11.5% of net collections, and statute currently provides a 4.5% allocation of net revenues to the program…
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