Finance committee accepts economic outlook; staff warns sales-tax diversions shrink general‑fund share

The Joint Finance-Appropriations Committee on Thursday accepted a report from the Economic Outlook and Revenue Assessment Committee that recommended conservative general-fund revenue targets of $5,990,000,000 for fiscal year 2025 and $6,400,000,000 for fiscal year 2026.

The committee accepted the report by unanimous consent after a motion to accept the EROC report and a second. Senator Kevin Cook, co-chair of the EROC committee, presented the panelrecommendation and urged caution. "We recommend cautious in making appropriations above the committee's revenue recommendation," Cook said during his presentation.

Why it matters: The revenue baseline the legislature adopts at the start of session constrains appropriation decisions across state agencies. Budget staff told JFAC the current structure of sales-tax distributions and recent statutory earmarks have reduced the portion of sales-tax receipts flowing to the general fund, increasing the risk that disruptions in income-tax receipts during an economic downturn would…