As key decisions loom affecting Nebraskans taxes and state spending, a new report says the state is taking in more money than expected.
The new report is by the Nebraska Department of Revenue. It says that in January, net tax receipts were nearly $26 million more than had been officially projected last April. That April forecast was raised in October, but even compared to that, tax receipts were nearly $21 million above projections.
Tax Commissioner Doug Ewald sees a longer-term improvement in revenues over the fiscal year that started July 1. "When you look at the first seven months of the current fiscal year, compared to the first seven months of the prior fiscal year, we are roughly seven and a half percent ahead when you look at the actual tax receipts," Ewald said.
The report could affect the Legislature's decisions on taxes and spending. It's the last one on monthly receipts before the Economic Forecasting Advisory Board meets on Feb. 24 to consider changing its official projections. Those projections, in turn, are used by the Legislature to make its budgetary decisions.
Sen. Lavon Heidemann, chairman of the budget-writing Appropriations Committee, said he'd rather see a few more months to establish a trend of higher revenues, adding that the report doesn't change his inclination not to add ongoing spending to the budget. "It's not enough to get excited enough to think you're going to do anything but something very minor. You're talking not even a Percent," Heidemann said.
In other words, even though revenues may be up seven and a half percent from last year, most of that was already anticipated in the forecast, and the "new" money beyond that is minimal.
Still, it's good news, said Sen. Jeremy Nordquist, another member of the Appropriations Committee. And while he's hesitant to suggest significant spending increases or tax cuts, Nordquist said if the report translates into increased revenue forecasts, there could be a little more room in the budget. "It gives us the flexibility make a few more key investments, make sure we can hold off on Medicaid cuts. Maybe we can do a little more for K-12 education. And it maybe gives us a little wiggle room to look at some targeted tax relief either in the form of targeted tax credits and relief to attract certain businesses to our state or maybe a small package to begin to phase out (state) Social Security tax," Nordquist said.