The state will have about $692 million less to spend in crafting a budget for the next fiscal year, a state panel was told Friday.
The state will have about $12 billion to spend, or a drop of about 5.6%, according to figures released during the Board of Equalization meeting.
The Board meets in December to approve figures which Gov. Kevin Stitt will use to craft his executive budget. That budget is a starting point for lawmakers, who will then craft one the state will use for the upcoming fiscal year.
Stitt, who chairs the board, said the reduction was attributable to a smaller amount in available cash to spend.
With recent tax cuts and the creation of additional tax credits, revenue is still going up, Stitt said.
Stitt said he was “very, very pleased where we are at.”
Total recurring revenue is up about $338 million, or 3.2%, compared to fiscal year 2026, according to figures provided by the Board of Equalization.
Stitt has championed reducing the state’s income tax and the elimination of the state sales tax on groceries, something lawmakers approved. He said every time he cuts taxes, critics say “the sky is falling.”
“Revenue keeps going up,” he said.
Senate Appropriations Chair Chuck Hall, R-Perry, said the state’s economy is strong, but revenue growth is slowing.
The Board of Equalization meets again in February to determine how much lawmakers will have to spend.
“Although these are early budget estimates and subject to change in the coming months, all signs indicate that state revenues will remain relatively flat, which will limit the Legislature’s ability to make major new investments next year,” Hall said.
State agencies have asked for more than $1.5 billion in new funding, Hall said.
That is “unrealistic” given the state’s financial outlook, Hall said.
Stitt said he will be advocating for mostly flat agency budgets when lawmakers return to the Capitol in February.
“I certainly always am looking for lower taxes,” Stitt said. “I don’t have any specific things right now, but we’re still working through what our agenda is going to be.”
The state’s Constitutional Reserve Fund, also called Rainy Day Fund, has slightly more than $1.3 billion in savings, while the Revenue Stabilization Fund has nearly $449 million.
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