The Institute for Fiscal Studies has warned Scottish taxes must rise to maintain free university tuition and prescriptions.
IFS analysts expect to see Holyrood funding, primarily from the UK government, "slow significantly" in the coming years, leaving the next Scottish government with stark choices.
The institute, The Times reports, leaders will have to choose between raising taxes or slashing spending on high-profile commitments such as education, health, and free bus travel for young people.
The think tank report says while the total resource budget available to Holyrood for day-to-day spending will rise from £52.2billion this year to £53.7billion by 2028-29 (1% per year), after deducting for projected allocation of benefits, the total pot will fall to £45.3billion and £45.9billion over the same period - a rise of just 0.3% per year.
Factoring in continued public sector wage increases and rising costs associated with policies like free bus travel and prescriptions, the IFS says the Scottish government will face "budgetary challenges".
The report states: “After several years during which resource funding has grown at a decent pace, growth in funding is set to slow significantly over the next few years, posing budgetary challenges for the next Scottish government.
“If residents of Scotland wish to continue to enjoy a more generously funded set of public services and benefits than is provided in other parts of the UK, it will be increasingly necessary for them to contribute more towards the cost through higher devolved revenues.”