Department of Revenue defends revenue projections and outlines tax-structure changes in budget hearing

Secretary Brown told the Appropriations Committee that the Department of Revenue's revenue estimates remain within standard accuracy tolerances even where nominal dollar variances (about $37 million on a $47 billion base) appear large. "Plus or minus 2% against an estimate is what anybody who relies on that for purposes of appropriating should expect," he said.

On tax-structure changes the administration presented several proposals aimed at modernizing the state tax code and broadening the base. Secretary Brown described accelerating the corporate net income (CNI) rate reduction toward 4.99% and moving banking levies (bank shares, mutual thrift and similar taxes) onto the CNI base. "Having a tax structure that accommodates how businesses operate is just in my mind evolution over time," Brown said, arguing combined reporting and consolidated reporting better match modern corporate operations.

Members pressed how those changes would affect specific sectors and whether stakeholders had been consulted. Brown said the administration has had long-running discussions with the banking community and emphasized that parity of effective rates across the transition is a core consideration; he also acknowledged the need for robust stakeholder engagement as bills are drafted.

Committee members also questioned the department about programmatic changes and fiscal assumptions. Secretary Brown and staff reported the expanded property tax/rent rebate has served roughly 525,000 recipients and that the Child and Dependent Care Enhancement (expanded tax credit) reached about 220,000 filers. On administrative improvements, the department said MyPath now participates in IRS Direct File and offers a logged-in prefill experience for personal income tax filings and rebate submissions; the PTRR had 26% of applications via MyPath according to department figures.

On the minimum wage, the department's fiscal presentation projected an annual net revenue increase of roughly $120 million under the governor's $15 minimum-wage plan, with some adjustments to program eligibility (for example, fewer people qualifying for special poverty provisions). Brown said the department did not model full dynamic spending-side offsets for social programs in this cycle but agreed such analysis would be valuable for lawmakers.

Next steps: The department will provide additional fiscal modeling, draft statutory language for proposed tax changes and follow-up material requested by committee members.