The Office of the State Budget Director recently released the “Quarterly Economic and Revenue Report” for the fourth quarter of fiscal year 2025 (FY 2025). The report highlights receipts for the fourth quarter, a review of FY 2025 and an unofficial forecast for the first three quarters of FY 2026. View the full report here.
General Fund Receipts
The state collected $15.7 billion in General Fund receipts in FY 2025 representing a 0.8% increase compared to FY 2024.
Individual income tax receipts are expected to decrease 3.2% in the first three quarters of FY 2026, reflecting the rate cut from 4% to 3.5% effective January 1, 2026, and continued usage of PTET credits.
Sales and use tax receipts totaled $5.8 billion in FY 2025, a 0.3% increase over FY 2024. Growth has slowed following several years of strong increases after legislative reforms in 2022 that expanded the tax to include additional services. Receipts are projected to grow 1.8% in the first three quarters of FY 2026.Corporate income and limited liability entity tax (LLET) revenue grew 46.9% in FY 2025 to a record $1.8 billion. However, receipts are expected to decline 23.2% in the first three quarters of FY 2026. Much of this revenue is typically collected in the fourth quarter, so early projections may not reflect full-year performance.
State property tax receipts totaled $839.3 million in FY 2025, a 3.9% increase over FY 2024, and are expected to grow 6.9% in the first three quarters of FY 2026.
Overall, General Fund receipts are projected to decline 2.8% in the first three quarters of FY 2026. Declines are expected in income and business taxes, while sales and property taxes are projected to increase. Note that these are unofficial estimates and that official revenue estimates will be released by the Consensus Forecasting Group later this year.
Road Fund Receipts
The state collected $1.8 billion in Road Fund revenue in FY 2025 representing a 0.6% decrease compared to FY 2024.
Receipts are expected to decline an additional 5.8% in the first three quarters of FY 2026 due to another 1.4 cents per gallon decrease, bringing the rate to 26.4 cents per gallon for FY 2026.
This continued decline impacts both the state and local governments, as counties receive 18.3% of motor fuels tax revenue to support county road maintenance.
Motor vehicle usage tax receipts totaled $719.5 million, a 7.2% increase over FY 2024. Receipts are expected to decrease 2.7% in the first three quarters of FY 2026 following several years of growth.Motor vehicle license fees totaled $117.3 million in FY 2025, a 1.9% decrease from FY 2024, and are projected to increase by 5.1% in the first three quarters of FY 2026.
Weight distance tax receipts totaled $86.3 million, representing a 0.6% decline from FY 2024. This per-mile tax on motor vehicle carriers over 59,999 pounds is expected to continue decline slowly, with a 1.2% decrease forecast for the first three quarters of FY 2026.
Motor vehicle operators’ license fees totaled $33.7 million in FY 2025, representing a 3.1% increase from FY 2024. These fees are expected to increase 2.7% in the first three quarters of FY 2026.
Overall, Road Fund receipts are projected to decline 4.8% in the first three quarters of FY 2026, driven by expected declines in the motor fuels tax and motor vehicle usage tax. Only motor vehicle license fees and motor vehicle operators’ license fees are expected to increase. Note that these are unofficial estimates and that official revenue estimates will be released by the Consensus Forecasting Group later this year.
