Senate Ways and Means adopts 2025–27 revenue estimates after cautionary economic discussion

At a meeting of the Senate Ways and Means Committee (date not specified), members approved a package of revenue estimates for fiscal years 2025–27 that will feed into the budget process. The committee set a series of line-item forecasts by voice vote after debate about the state’s economic outlook, tax enforcement and new gaming capacity.

The numbers adopted on a series of voice votes include revised forecasts for business taxes, room-and-meal taxes, tobacco taxes, lottery receipts and several other dedicated revenue lines. Committee members repeatedly emphasized caution — several members argued for conservative estimates to avoid creating a shortfall that later would require cuts — while others argued certain streams (notably lottery revenues tied to historic-horse-racing machines) should be raised to reflect recently opened or expanded facilities.

Committee members discussed national economic signals, tariff uncertainty and Federal Reserve policy as factors shaping revenue prospects. The committee chair (name not specified) said, “Our goal by the end of this session will be to have predictions,” and staff said the figures approved today will be passed to the finance committee to prepare the budget. Several members also referenced recent legislative changes that affect enforcement and collection (for example, changes expected to strengthen collection of vaping-related taxes) when explaining why they favored higher or lower estimates.

Votes at a glance (selected lines adopted)

- Business taxes: FY2025 $1.100 billion (approved); FY2026 $1.185 billion (approved). These totals were adopted by voice vote as the committee’s estimate for business profit tax revenue.

- Rooms and meals tax: FY2025 $334.5 million; FY2026 $342.0 million; FY2027 $350.0 million (each approved by voice vote). Members described rooms-and-meals as a relative bright spot and factored tourism and “staycation” patterns into the estimates.

- Tobacco tax: FY2025 $183.5 million (split-the-difference between agency low/high); FY2026 and FY2027 set at $177.7 million (approved). Committee members cited a recently passed law affecting vape-tax enforcement when explaining the numbers.

- Lottery (including historic-horse-racing machines): FY2025 $200.0 million; FY2026 $220.3 million; FY2027 $220.3 million (approved). Staff told members that machine counts increased rapidly (to about 4,900 machines expected by June), and the committee added roughly $26.8 million to the multi-year forecast to reflect those openings.

- Utility property tax: FY2025 $48.0 million; FY2026 $48.5 million; FY2027 $50.0 million (approved). Members noted that valuation changes and utility capital improvements drive much of the growth in this line.

- Insurance tax: FY2025 $174.0 million; FY2026 $160.5 million; FY2027 $168.0 million (approved using agency high numbers in some years).

- Court fees: FY2025 $13.6 million; FY2026 $13.7 million; FY2027 $13.7 million (approved on agency figures).

- Securities revenue: FY2025 $44.3 million; FY2026 $44.4 million; FY2027 $44.5 million (approved; agency numbers unchanged).

- Beer tax: FY2025 $12.5 million; FY2026 $13.0 million; FY2027 $13.0 million (approved).

- Medicaid recoveries: FY2025 $2.2 million; FY2026 $3.2 million; FY2027 $3.2 million (approved; staff noted agencies often come in slightly higher than initial estimates).

What members said and the committee next steps

Several senators urged conservative estimates because “it’s easier to add money in the second year than it is to have the governor cut spending in the second year,” while others argued certain revenue streams should be raised to reflect recent, measurable changes (for example, the rapid addition of HHR machines). A participant noted that while some gaming growth could cannibalize existing venues, out-of-state visitation and new facilities were likely to bring incremental revenue.

Committee staff (Chris and Sonia) said they will finalize the worksheet that reflects today’s votes and produce an Education Trust Fund split and comparison sheets against the governor’s and the House’s estimates; staff also said the committee’s revenue amendment will be offered to the House bill on unrestricted revenues in the name of Senator Lang.

The meeting record shows the committee adopted the slate of estimates by voice vote and adjourned after ordering staff to finalize and circulate updated worksheets.

Ending

The estimates the committee adopted will be used by the finance committee as it prepares budget language and amendment materials. Staff said updated spreadsheets and comparison pages will be emailed to members when complete.