LINCOLN, Neb. (AP) – The Nebraska Economic Forecasting Advisory Board expects state revenue to drop significantly because of the coronavirus, but its projections for the next 2 years are far from the doom-and-gloom some national forecasting services had feared.
The board on Thursday reduced its estimate for the current fiscal year to a total of $5.125-billion dollars in net tax revenue.
That’s $48.5-million less than its February update, but far from the $345-million reduction predicted by at least one service, and still leaves a surplus of $90.1-million available for lawmakers to add to the biennial budget passed last year.
Gov. Pete Ricketts says the forecast reflects the strength of Nebraska’s economy and should clear the way for lawmakers to lower property taxes and approve new tax incentives for businesses, but State Senator John Stinner of Gering isn’t as certain.
Stinner, chairman of the budget-writing Appropriations Committee, says he plans to take a cautious approach to the rosy predictions – explaining that in his mind, he thinks lawmakers “need to be as conservative as we possibly can because of the uncertainty.”
In making their predictions, the forecasting board members said Nebraska’s economy appears to be stronger than other parts of the country because it relies less on hospitality services that were devastated by the pandemic.
They also pointed to a still-strong housing market and the federal assistance that businesses received to soften the virus’ impact. Board member Thomas Henning says “Nebraska is really a shining star and has done really well.”
Omaha attorney and radio executive Steve Seline, another board member, says his company’s station in Illinois suffered a roughly 50% drop in revenue while the Nebraska stations have experienced only a 10% decline – adding that he’s “probably more optimistic than I should be.”
Other board members said they were concerned about the impact of widespread layoffs and employees who have seen their work hours cut. Richard McGinnis is worried about “people who are living paycheck to paycheck” and a possible increase in personal bankruptcies.