The level of revenues pocketed by a government during the fiscal year often deviates from that projected by this government in its budget. Though this difference between actual and projected revenues is not always negligible, little is yet known about what may explain such forecast errors. In the present paper, we analyse whether differences in the level of government fragmentation are useful in explaining local government tax revenue forecast errors – controlling for various other factors. Using data on 242 Flemish municipalities for the period 1992-2002, we find that two-party governments are more optimistic than single-party governments. In contrast to our initial expectations, governments with at least three parties are significantly more careful (or less optimistic) in their revenue projections than single- or two-party governments.