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Committee caps municipal rooms-and-meals distribution at $137M per year for the biennium
Summary
The House Finance Committee voted to fix the municipal share of rooms-and-meals tax distributions at $137 million per fiscal year for the upcoming biennium, reducing the automatic growth municipalities would have received under the 30% formula and increasing state-held revenue by roughly $11 million for the biennium.
The House Finance Committee approved an amendment that freezes the municipal distribution of the rooms-and-meals tax at $137 million per fiscal year for the 2026–27 biennium, rather than allowing the distribution to grow automatically under the current 30% formula.
Representative Campbell explained the amendment sets a fixed annual municipal distribution level instead of the statutory 30% calculation. Committee staff said the figure is slightly larger than the current-year distribution but below projected collections, creating roughly $11 million in additional state general-fund resources for the biennium.
Representative Ebel and other members noted that municipalities would not receive increases they otherwise would under the 30% formula if rooms-and-meals revenues grow; the committee discussed deferring a larger, bipartisan rooms-and-meals distribution bill to next year and handling the freeze as a budgetary measure.
The amendment passed on a recorded vote of 6 in favor and 2 opposed. Members said the policy preserves the distribution formula in law but suspends automatic increases over the two-year window to provide state revenue relief for the current budget cycle.
