By Howard Fischer | Capitol Media Services
Key Points:
- State budget faces potential revenue loss due to conformity with federal tax code changes
- Non-conforming could result in $381 million revenue loss in fiscal year
- Sen. Kavanagh believes conformity is necessary to avoid an “accounting nightmare”
The newly enacted so-called Big Beautiful Bill could blow a not-so-beautiful hole in the just-enacted $17.6 billion state budget.
New figures from legislative budget analysts say that having state income tax laws conform with the changes made by Congress and signed by President Trump would reduce revenues this fiscal year by $381 million. And that’s without considering another $57 million in possible effects.
Strictly speaking, none of that has to happen. The losses would occur only if state lawmakers and Gov. Katie Hobbs agree that what the state considers taxable should mirror federal law.
