The Office of State Budget Director that General Fund receipts rose 29.1 percent in July to begin Fiscal Year 2027. This is one of the highest monthly growth rates in four years. Total revenues for the month were $1,459.8 million, an increase of $328.7 million over July 2025 receipts.
The official revenue estimate for FY27 calls for revenue to decline 0.5 percent compared to FY26actual receipts. Therefore, receipts can drop by 2.7 percent over the remaining eleven months of the fiscal year and still meet the General Fund revenue estimate.
State Budget Director John Hicks remarked that “General Fund revenues posted substantial gains from corporation income and sales tax accounts. Corporate income tax declaration payments were over $350 million more than in July 2025 due to a very small number of taxpayers’ unusually large estimated payments. Sales tax receipts also showed well with a 9.5 percent increase over the prior year, continuing a recent trend over the last three months of 9.7 percent growth. Individual income tax receipts slipped 12.3 percent, affected by a 12.5 percent reduction in the tax rate, from 4.0 to 3.5 percent. Strong corporate taxes, coupled with a large increase in the sales tax, reflect conditions where businesses profits are high with a vibrant consumption sector of the economy.”
Among the major accounts:
• Corporate income tax receipts of $331.0 million exceeded July 2025 collections by $339.7 million. This was the largest monthly receipts total in the 20 years since the corporate taxes underwent significant change.
• Individual income tax receipts fell 12.3 percent as the 2026 tax rate declined by 12.5 percent.
• Sales tax revenues followed up the 8.0 percent growth during the fourth quarter of FY26 with a 9.5 percent increase in July. The level of collections in July was the fourth largest monthly sales and use tax total ever recorded.
• Cigarette tax collections increased 19.5 percent for the month to $23.8 million.
• Property tax receipts rose 23.7 percent due primarily to the motor vehicle property tax account. Early in the fiscal year, it is common to see large percentage changes in property tax collections because of the collection schedule.
• Coal severance tax revenues grew by 6.6 percent to $6.3 million.
• Lottery revenues were even with the $26.5 million dividend payment received in FY26.
Road fund revenues
Road Fund revenues for July totaled $146.2 million, a 14.7 percent decline compared to last July. The official Road Fund revenue estimate for FY27 calls for revenue to increase 0.8 percent compared to FY26 actual receipts. Based on the first month’s receipts, revenues must increase 4.3 percent for the rest of the fiscal year to meet the official estimate.
Among the major Road Fund categories:
• Motor fuels tax receipts dropped by $15.2 million, or 21.6 percent, in July due to lower tax rate in June of FY26.
• Motor vehicle usage tax receipts fell 10.5 percent.
• License and privilege taxes declined 2.8 percent despite motor vehicle licenses and permit rising 17.9 percent.
Office of State Budget Director