A strong final month allowed Nebraska to finish the fiscal year that ended June 30 just ahead of the projection for net state tax revenue set by the state Economic Forecasting Advisory Board in April.
Net receipts for June were $673-million dollars – 9% or $55.7-million above estimates. That pushed the final total for the fiscal year $6.37-billion dollars – $3-million more than the projections.
Supporters of the massive tax relief package passed by the legislature, including Gov Jim Pillen and Revenue Committee chair Lou Ann Linehan of Omaha, praised the accuracy of the estimate and said it shows the state can afford the tax package.
It’s important to remember, though, that the forecasting board numbers included the first 10 months of the fiscal year and that May came in almost 9% and $53-million less than the board had predicted just the month before.
Net individual income taxes were $44-million dollars below projections for the final two months of the fiscal year while sales and use taxes fell short by $14.1-million.
Critics of the tax cut package say it’s too soon for Gov Pillen, a former Husker, to spike the football.
Rebecca Firestone, executive director of the progressive think tank OpenSky Policy Institute, says the numbers are a good sign of the economy’s resilience but that the tax package and one-time spending from the cash reserve could put Nebraska in a pinch.
Firestone says “lawmakers removed some of the cushion available for a potential economic downturn,” adding that “as a result, paying for the tax cuts passed in 2023 without impacting state services remains a concern.”