The Nebraska Economic Forecasting Advisory Board has voted to raise revenue projections for the current fiscal year by $621-million dollars, bringing the expected total revenue to $6.44-billion.
In hiking its projection Friday, the Forecasting Board said it expects increases in all 4 tax categories including projected increases of $405 million in individual income tax and $113 million in corporate income tax.
The board also raised its projected total revenue receipts for the next two fiscal years, boosting next year by $809.5-million to $6.47-billion and FY 24-25 to $6.55-billion, an increase of $1.05 billion.
If those estimates prove accurate, Nebraska’s Cash Reserve – its Rainy Day Fund – will grow from the current $1.7-billion dollars to $2.3-billion by the end of the third year.
Last month, the federal Bureau of Economic Analysis reported that personal income in Nebraska increased by an annual rate of 8.5% through the second quarter of this year, the 5th-highest increase in the country..
Governor Pete Ricketts says the forecasting board’s move reflects the state’s steady growth and puts the 2023 Legislature in a great position to build on the historic tax relief delivered to Nebraskans earlier this year.”
Dr Rebecca Firestone, Executive Director of the OpenSky Policy Institute, says the rosey forecast could “present an opportunity for policymakers to start looking at ways to address vital challenges and help more hardworking Nebraskans enjoy ‘The Good Life.’
The Economic Forecasting Advisory Board meets twice a year, in February and October, to set the revenue projections used by the governor and legislature in setting state budgets. Their next meeting is Feb 24, 2023.
Firestone says addressing concerns of average Nebraska such as access to affordable housing, childcare, mental health care, and transportation “islikely to build a stronger, more resilient Nebraska economy than any efforts to divert a budget surplus to further income tax cuts.”