December State tax collections dropped by $285 million or 6.6% compared with December 2024, a shift that tightens the state budget margin for error halfway through the fiscal year.

Revenue collections for the month totaled $4.062 billion, also falling $167 million or 4% below the state’s benchmark, the Department of Revenue reported Tuesday. The state collected about $19.636 billion through the first half of the fiscal year, representing modest growth of $375 million or 1.9% higher than collections in the same period last year. The haul was roughly on par with the year-to-date benchmark, landing at 0.1% or $23 million higher.

The Healey administration is managing the fiscal 2026 budget and is currently forming their proposal for the fiscal 2027 spending plan, which will be released by the end of the month. Snyder told top budget writers in December during the annual revenue forecasting hearing that DOR expects tax revenue growth in fiscal 2027 to land between 1.7% and 3.1%