As states work to finalize their budgets for fiscal 2026, many have published revised revenue forecasts, with most having revised estimates downward. A number of revenue forecasts discussed heightened economic uncertainty partly brought upon by changes at the federal level, while stating a cautious approach is warranted. Specifically, revenue forecasts noted the impact of potential changes in federal spending, federal tax provisions, trade policy including tariffs, federal workforce levels, immigration, geopolitical events, and consumer confidence in explaining the revisions. The lowered revenue forecasts come at a time when states already have been experiencing tighter budgets due to slower revenue growth, increasing expenditure demands, and the winddown of federal COVID aid. In this environment, new money is limited, and some states are projecting budget gaps in the out-years as expenditure growth – particularly in Medicaid – is expected to outpace revenues.
Listed below are highlights from recent state revenue forecasts detailing changes in projections as well as explanations of the revenue revisions. For more information, please visit NASBO’s website for links to updated state revenue forecasts.
Alaska’s unrestricted general fund revenue forecast for fiscal 2026 was reduced by $70 million from its fall forecast, driven by a revised outlook of oil price and production. The forecast notes there is continued uncertainty due to recent geopolitical and financial events, causing volatile conditions. (March 12)
Arizona projected that the level of available resources for the fiscal 2026 budget process has fallen to $277 million from a projected $612 million in its January baseline forecast. The forecast stated that given considerable uncertainty surrounding federal trade, spending, and tax policy, the revised forecast is more cautious than the January baseline. (April 21)
Colorado revised its fiscal 2026 general fund revenue forecast downward by $30.6 million compared to its December forecast. The forecast expects strong wage growth in 2025 but muted retail sales and slowing overall consumption growth due to drops in consumer confidence as a result of elevated uncertainty. Economic growth was also revised due to elevated uncertainty around tariffs impacting spending and investments. (March 17)
Connecticut forecasted $23.71 billion in total taxes for fiscal 2026 compared to a projection of $23.82 billion in its January forecast. (April 30)
Delaware forecasted fiscal 2026 net receipts of $6.76 billion, compared to $6.79 billion in its December forecast. (March 25)
The District of Columbia is forecasting $10.63 billion in general fund revenue for fiscal 2026, compared to $10.96 billion in its December forecast. The downward revision is largely due to forecasted sharp declines in employment levels as the federal government proceeds with reducing its workforce significantly. The resulting decline in income and consumption means lower expected revenue from the District’s individual income and sales taxes. (February 28)
Florida increased its fiscal 2026 revenue forecast by $503.5 million compared to its July forecast, with much of the upward adjustment relating to sales tax. At the end of January, the state’s sales tax was 1.7 percent above the estimate for fiscal 2025. With consumers facing increasingly strong headwinds, $510.0 million was added to fiscal 2025 (1.4 percent), but only $385.4 million (1.0 percent) was added to fiscal 2026. (March 14)
Hawaii’s fiscal 2026 revenue forecast projects a decrease of 2.25 percent, compared to a decrease of 1.5 percent in its January forecast. The forecast stated the negative growth expected in fiscal 2026 is due in part to a higher base in the previous fiscal year driven by a one-off boost in estate tax collections. The lower forecast in fiscal 2026 also reflects the heightened economic uncertainty caused by policy changes at the federal level. (March 12)
Indiana’s revenue forecast projects $22.23 billion in general fund revenue in fiscal 2026, compared to $23.19 billion in its December forecast. The economic forecast overview notes that while the broad economy is projected to continue to grow, growth projections for employment, wages, and personal income have been revised downward from December. In addition, the combination of economic performance through the first quarter of 2025 and expectations of federal policy actions drive the outlook through the biennium. (April 16)
Iowa is forecasting $8.51 billion in net general fund revenues for fiscal 2026, compared to a projection of $8.73 billion in December. (March 25)
Kansas’ revised estimate for fiscal 2026 is $10.07 billion, an increase of $219.6 million compared to its November forecast. (April 17)
Maine revised its forecast downward by $23.3 million for the fiscal 2026-2027 biennium, compared to December projections. The forecast emphasized the high degree of uncertainty in the current economic forecast. In particular, it highlighted rapidly changing tariff policies, a period of significant federal fiscal austerity, and global geopolitical tensions, including between Canada and the U.S. that a could drive a decline in Canadian tourism to Maine. (May 1)
Maryland is projecting its fiscal 2026 total revenues to be $25.38 billion, compared to $25.62 billion in its December forecast. The forecast notes that the most probable event is a significant reduction in employment and spending that will slow Maryland’s economy. It adds that the federal government slowdown is expected to impact withholding taxes the most, but the state is also making modest reductions in its sales and corporate income tax projections. (March 6)
Minnesota’s total tax revenues for the fiscal 2026-2027 biennium are now estimated at $61.80 billion, compared to $61.41 billion in its November forecast. The state noted that higher forecast inflation results in increases in projected revenues and expenditures and that shifting policies at the federal level introduce significant uncertainty to the projections. (March 6)
Nebraska’s total projected receipts for fiscal 2026 were lowered to $6.87 billion, a decrease of $90 million compared to the February forecast. (April 25)
Nevada is forecasting approximately $12.2 billion in general fund revenue for the fiscal 2026-2027 biennium, a $191 million decrease, or 1.2 percent, from its December forecast. In their presentation to the Economic Forum, economists noted they expect a potentially strained labor force amid reduced immigration, modest gains in unemployment, and decreased tourism. (May 1)
New Jersey’s total revenues for fiscal 2026 are projected to be $56.8 billion, or $1.9 billion above fiscal 2025’s levels. The state notes that the result of future policies adopted in Washington, D.C. could be expansionary or contractionary, but the net effect remains unknown at this time. Additionally, economic forecasters are maintaining cautious, slow growth forecasts for the coming year. (April 1)
New York’s baseline outlook for both the economy and revenue projects moderate growth for calendar year 2025. The outlook adds that the economy faces downside risks in the coming year from expected changes to domestic tax, trade, immigration and fiscal policies, and worldwide uncertainties. (February 27)
North Carolina is forecasting revenue collections of $34.89 billion in fiscal 2026, a year-over-year growth rate of 0.5 percent. The revenue forecast assumes the recent momentum of strong economic growth will continue into the beginning of the next biennium, with gradual slowing starting in late 2025. (February 14)
Oklahoma is projecting $8.48 billion in total general revenue for fiscal 2026, compared to $8.42 billion in its December forecast. (February 14)
Oregon is forecasting $35.90 billion for the fiscal 2026-2027 biennium, compared to $27.78 billion in the current biennium. The large percentage changes between the biennia are due to kicker credits affecting personal income tax collections. The forecast notes Oregon economic activity will be highly vulnerable to national priorities related to tariffs, immigration, and federal expenditures, adding that exports and manufacturing play an outsized role in the state. (February 26)
South Carolina is forecasting $14.11 billion in gross general fund revenue for fiscal 2026, compared to $13.98 billion in its December forecast. (February 13).
South Dakota’s revised forecast projects $2.446 billion in total ongoing receipts for fiscal 2026, compared to $2.463 billion in the governor’s recommended budget from December. The forecast assumes employment growth will slow both nationally and in South Dakota, while there will be continued personal income growth in South Dakota. (February 12)
Utah’s ongoing funds increased by $16 million from October consensus numbers. The state notes overall economic growth remains positive, despite revenue being down from October estimates. (February 19)
Washington is projecting $67.16 billion in general funds for the fiscal 2026-2027 biennium, compared to $67.82 billion in its November forecast. The report notes there is an elevated risk to the forecast due to recent changes in trade policy and the federal government. (March 18)