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Comptroller and BRE report $260 million one-time estate-tax gain; forecast otherwise cautious
Summary
Comptroller Brooke Lierman and BRE Director Robert Rierman presented March revenue estimates: a one-time $260 million estate-tax boost to FY26, modest upgrades to personal income tax (capital gains), weakness in corporate and IT/data-services sales tax estimates, and a cautious outlook given labor-market cooling and federal contractor weakness.
Comptroller Brooke Lierman and Bureau of Revenue Estimates Director Robert Rierman presented the March revenue estimates to the Appropriations Committee, reporting a mostly level forecast but flagging a one-time windfall and several sectoral shifts.
BRE said overall net revenues were roughly flat once one-time items were excluded. The bureau raised its personal-income-tax outlook because withholding and estimated capital-gains payments have been stronger than expected, but it trimmed corporate income and the IT/data-services portion of the sales tax. BRE raised interest-income estimates by more than $100 million (mostly in fiscal 2026) and reported an unusually large, apparently nonrecurring, $260 million estate-tax collection that drives a fiscal-26 upward revision.
Rierman cautioned that strong withholding and sales-tax collections appear at odds with recent labor-market measures. BRE noted that withholding grew roughly 4 percent in calendar 2025 despite a contraction in employment, and that labor-market indicators have cooled in early 2026. He said federal-contractor sectors—especially defense contractors—showed relative weakness in estimated corporate payments.
Delegate Edelson asked whether the strong tax receipts should be expected to continue; BRE replied that the bureau is deliberately conservative and will not assume continued outperformance. The Comptroller and committee members praised the BRE team for steady forecasting amid volatile conditions.
The Comptroller's office said the estate-tax gain is being treated as a one-time item and is not being built forward into the multi-year forecast. BRE recommended caution in relying on the recent strength in withholding and sales tax for ongoing revenue assumptions.
