All but four states ended their fiscal year in June, revealing mostly good news in terms of revenue streams.
"Despite some variation in year-over-year growth in tax collections, most states with data publicly available ended fiscal 2026 above their most recent official revenue forecast, with many states seeing revenues come in 2% to 3% above forecast," writes Brian Sigritz the director of state fiscal studies, at the National Association of State Budget Officers.
"A smaller number came in below their most recent revenue forecast, but in some instances still exceeded the original revenue forecast used in their enacted budget."
Tax collections play a key role in the states' credit ratings which helps dictate borrowing costs.
The numbers come from NASBO's Fiscal Year Update and show generally increased personal income tax collections, strong sales tax numbers and volatile corporate tax fluctuations including several decreases of more than 20%.
California emerged as the big winner this year, with general fund receipts totaling $258.87 billion, or 11.1% above fiscal 2025.
Maine and South Dakota both netted surpluses of $148 million and $69 million respectively. Maine has had a surplus for the last five years in a row.
"Maine law requires dividing the remaining general fund surplus into an 80/20% split between the Budget Stabilization Fund and the Highway and Bridge Capital Fund," said NASBO.
The news was not so good in Idaho which shows a 2.6% drop in revenues compared to last year with income, sales and corporate tax collections all taking a hit. The state sill beat what was forecast by 3.1%.
Iowa has a similar story showing a drop of 9.2% in income tax, 21.1 % in corporate taxes, and a 4% increase in sales tax.
The Pew Charitable Trusts are also crunching state tax revenue numbers looking for trends by using full year measurements from 2025.
"After five years of widespread volatility, state tax revenue showed signs of stabilization in 2025," writes Justin Theal, a senior officer with Pew and Alexandre Fall, a principal associate.
"Total collections remained below their long-term trends nationally and in most states for the second consecutive year, meaning states generally have fewer resources available for tax cuts, public services, bolstering reserves, or other priorities."
Pew believes California's big jump in 2026 can be attributed to "rising personal income tax revenue tied to stock market gains and strength in the technology sector, including the recent boom in artificial intelligence."
Although things appear to be on an even keel, the future of state budgets remain cloudy due to federal policy enacted through the One Big Beautiful Bill Act.
"The law's tax code changes—such as to personal deductions and business spending provisions—are presenting immediate challenges in many states and, in some cases, creating or exacerbating projected budget gaps," said Pew.
Since the law was passed many state have
The law also shifts additional costs of Medicaid and the Supplemental Nutritional Assistance Program from the federal government to the states with the effects expected to materialize in 2027.
