November State Revenues Temporarily Boosted by Refund Revision and Property Sale

State revenue collections in November yielded the first monthly surplus since the State’s fiscal year began on July 1. However, the sources of the surplus provided mixed indications about State revenue trends in the future, and offered no concrete assurance that revenue surpluses would continue in the coming months.

Interest and Dividends Tax Refunds Revised

The largest swing in State revenue collections came in a change in the accounting of Interest and Dividends Tax refunds. Revenue collections in October for this tax, which previously collected revenue from income generated by wealth and was repealed for 2025, was $20.3 million below expectations because refunds outpaced final returns.

However, the State changed the accounting in November to shift those refund payments off of the cash-basis revenue plan for State Fiscal Year (SFY) 2026. These refunds were technically attributable to SFY 2025, as that was when the tax last existed, and were not a part of the State Revenue Plan for the current State Budget. That change added $17.3 million in General Funddollars back into State cash revenues for SFY 2026, but may make the State’s fiscal situation for SFY 2025 worse than previously anticipated in the final audited numbers.

This change reduced the overall combined General Fund and Education Trust Fund revenue deficit for SFY 2026 to $6.2 million (0.7 percent) below planned amounts. The revenue surplus over expectations for the month of November alone was $23.2 million (16.3 percent), but would be only $5.9 million (4.1 percent) without the Interest and Dividends Tax accounting change.

Property Sales and Corporate Tax Payments

Outside of the Interest and Dividends Tax refund accounting change, other revenue sources pointed in a few different directions.

The most favorable change for State revenue trends from this report may be the small surplus generated by the combined revenues from the two business taxes. Revenues were $3.9 million (15.8 percent) ahead of the target for November, and were $12.1 million (73.3 percent) above the same month last year. However, this November surplus might be an isolated case; the Department of Revenue Administration reported that increased payments from corporations boosted revenues, but revenues were also increased due to a shift in the timing of some upcoming refunds into December, which might push down revenues that month. Overall, receipts from the business taxes, which are two major tax revenue sources that served as a primary source of revenue growth in recent State Budget cycles, remain short of expectationsfor the year thus far by $22.7 million (7.4 percent), and are $6.8 million (2.3 percent) behind last year’s collections to date.

Similarly, receipts from the Real Estate Transfer Tax came in better than anticipated in November, but were reportedly bolstered by the one-time sale of a large commercial building in Hillsborough County. While that sale may not be repeated, Real Estate Transfer Tax revenues were $5.7 million (27.7 percent) ahead of expectations and the largest source of surplus in November, coming in at $4.3 million (4.0 percent) above planned amounts for the year thus far. Revenues are also better than last year by $16.8 million (17.9 percent), which could be a source of optimism for State revenues going forward, tempered in part by the one-time impacts of the large transaction that pushed November revenues up.

Most other key tax revenues were relatively close to expectations. Meals and Rentals Taxrevenues were $1.1 million (0.6 percent) below planned amounts for the year as of the end of November. Tobacco Tax revenues were $0.9 million (1.1 percent) behind for the year after falling well short of target during November. Insurance Premium Tax collections are about the same as last year at this point, and ahead this year thus far by a larger percentage of expectations, but a small amount of total revenue at $2.0 million (18.5 percent).

Lottery Rises and Liquor Slips as Cash Reserve Revenues Wane

Revenues collected by the Lottery and Gaming Commission continue to be a consistent positive influence on State receipts. The Commission now leads all other major General and Education Trust Funds revenue sources in growth relative to planned amounts, running $16.7 million (26.9 percent) ahead of target for the year thus far, and last year’s collections, outpacing SFY 2025 by $19.8 million (33.6 percent) through November. The Commission attributed this to more gambling than expected in Mega Millions, Keno, sports betting, and historic horse racing. Newly-legalized video lottery terminals are starting to generate revenue for the State, but have not yet generated as much revenue as anticipated in the State’s planning.

Profits from the Liquor Commission have declined in recent years, and revenues to the General Fund are lower than expectations this year thus far. Revenues are $5.9 million (12.6 percent) below planned amounts through November, and November’s collections were approximately in line with that trend. While the Liquor Commission’s contributions to the General Fund are higher this year than last thus far, that change stems from last year’s General Fund revenues being offset by a transfer to support the State’s Medicaid Expansion program; that transfer is not being repeated this year.

For the last two years, State finances have benefited substantially from interest on State cash holdings. This revenue source continues to perform better than policymakers planned, generating $14.1 million (39.0 percent) more than anticipated for the year thus far. Comparisons to last year, however, show it is a waning revenue source, as the earned interest is $17.7 million (32.8 percent) lower than last year at this time.

A Key Month to Come

November revenues offered new insights and revisions that buoyed the revenue outlook a bit. However, whether there are truly concrete reasons for optimism may be revealed in the December business tax receipts.

December is one of the four quarterly estimate payment months for the State’s two primary business taxes. A stronger rebound in December, or a return to shortfall, will offer the best hints of the future directions of State revenues since September’s receipts.

About 71.7 percent of SFY 2026’s State revenues were planned to be collected from December to June. While the State’s fiscal outlook is becoming clearer, future months will provide much more information about the magnitude of risks to State services from any revenue shortfall.

Phil Sletten is the research director of the New Hampshire Fiscal Policy Institute.