Finance committee hears investment outlook and sales tax recovery as revenue estimates rise slightly

Unidentified Staff (Speaker 6) provided an investment update, saying the Federal Reserve had no rate changes at its Jan. 8 meeting and that a new Fed chair is expected in May 2026 with a few rate cuts anticipated thereafter. Staff described the portfolio strategy as a laddered mix of short and longer maturities to balance near‑term rate expectations and noted the portfolio continues to outperform benchmarks.

On revenue, Unidentified Staff (Speaker 5) reported sales tax performance is improving — the shortfall moved from 2.3% below estimate to 1.9% below — and that recent Commonwealth sales tax notices provide reassurance. Staff cited a FY27 total revenue estimate of $407,000,000 compared with $398,000,000 the prior year and said the authority will update its six‑year revenue estimates on a two‑year cycle tied to the program update.

Committee members asked about timing and sensitivity to macroeconomic shifts; staff said they will shorten maturities if cuts occur sooner and will reassess revenue estimates as new data arrive. The committee did not take formal action on the investment presentation; staff will continue monitoring markets and report back.