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Analyst: sales-tax earmarks and online-sales formulas shrink general fund flexibility
Summary
Legislative staff said sales-tax policy changes and earmarks (school modernization, Techum, tax relief fund) mean the general fund's share of sales tax receipts fell from about 86% in 2008 to roughly 64% in 2026, reducing flexibility to use these receipts to balance the budget.
Keith Bybee walked the committee through a historical view of sales-tax distributions and showed how policy choices have reduced the percentage of collections available to the general fund. "In 2008... about 86% of all sales tax collections went to the general fund," he said, adding that by 2026 the general fund receives roughly 64% of sales-tax distributions because of earmarks for school modernization and transportation (Techum), revenue sharing, and the growing share from online sales that flow to a tax relief fund.
Bybee named specific drivers: a school modernization allocation of roughly $125,000,000 annually, Techum allocations for transportation expansion, and online-sales revenue directed to the tax relief fund that has its own distribution formula (including homeowner property tax relief and the office of public defender). He said these earmarks reduce the portion of sales tax available to help balance the general fund.
