The Nebraska Economic Forecasting Advisory Board has lowered its revenue projection for the rest of the current fiscal year by $80-million dollars, but increased its estimate for the next 2 years by the same amount to leave the bottom line the same.
The panel cut $200-million dollars from its FY 2023 projection for sales and use taxes and individual income taxes while upping those for corporate income and miscellaneous taxes by $120-million for the overall $80-million reduction.
The board increased the total revenue projection for FY 24 by $25-million and for FY 25 by $55-million to leave the 3-year total at $6.6-billion dollars. Governor Jim Pillen calls it “promising news – a sign of Nebraska’s economic strength that means ‘full speed ahead’ for tax relief for hard working Nebraska families.”
State Senator Robert Clements, chairman of the budget-writing Appropriations Committee, and Revenue Chairman Senator Lou Ann Linehan were also both pleased with Linehan reporting that the board members all said the future is very bright.
Floor debate in the legislature is set to begin next week on the 2-year state budget put together by Clements’ committee. It increases spending 2.3%, a little higher than Governor Jim Pillen’s recommended 1.5% increase.
The main differences are an additional $80-million dollars to increase reimbursement
Rates for Medicaid providers and a 2.5% budget increase for the University of Nebraska system compared to Pillen’s 2%.
The committee also included negotiated pay raises for state workers of 7% the first year and 5% the second, final funding for a new $366-million dollar prison, $575-million to build the Perkins County Canal, and $1.5-million in seed money for a museum and visitors center in the unused fifth floor of the State Capitol Rotunda.
Clements says it still leaves about $700-million to implement PIllen’s income and property tax cut plan. Debate on the package of $5.34 billion in spending in the fiscal year that starts July 1st and $5.36 billion the next year is set to start on Wednesday.