‘Extraordinarily high’ revenues for Nebraska expected to drop, fiscal analyst says

LINCOLN — Although Nebraska noticed file excessive revenues on the finish of its newest fiscal yr, state monetary analysts do not anticipate the development to proceed. 

Nebraska’s Tax Price Evaluate Committee met Monday to listen to the newest report on the state’s revenues on the finish of fiscal yr 2021-22, which completed June 30. Tom Bergquist, director of the state’s Legislative Fiscal Workplace, mentioned Nebraska’s income progress was a record-setting 22.1%, greater than 7 proportion factors greater than the earlier file of 13.5% that was set final yr. 

Earlier than final yr, Nebraska’s earlier record-high income progress was logged within the late Nineteen Eighties, at round 12%, Bergquist mentioned. At first of the fiscal yr, he mentioned, the state’s forecasting board projected Nebraska would see about 10.6% income progress. 

In accordance with a Nebraska Division of Income report launched Friday, the state collected $624 million extra for the fiscal yr than what was predicted in February. A lot of that was collected between March and April, Bergquist mentioned, when about $515 million was introduced in. 

General, Nebraska noticed web tax revenues close to $6.35 billion through the fiscal yr, in response to the report. 

The spike in revenues could be largely attributed to a bounce in particular person earnings taxes, which have been up 87%, and company taxes, which have been up greater than 100%, Bergquist mentioned. 

One space the place state revenues dropped was in gross sales taxes, which Bergquist mentioned have been down $46 million in February. An enormous motive for that, he mentioned, have been excessive gross sales tax refunds through the fiscal yr, reaching about $213 million. 

“We’re fairly lucky we had it occur throughout a excessive income time,” mentioned State Sen. John Stinner of Gering, chair of the state Appropriations Committee. 

The state revenues have been “terribly excessive,” Bergquist mentioned — sufficient that he expects the forecasting board will set its subsequent income projections greater than ever earlier than in October. He mentioned, nevertheless, that Nebraska already might have hit its peak. 

Bergquist famous that state revenues usually fluctuate from yr to yr. About 5 years in the past, he mentioned, Nebraska noticed back-to-back years the place total income progress was at a meager 0.3%.

“When it is good, it is good,” Bergquist mentioned. “And when it is dangerous, it hurts.”

One huge query mark is how a lot federal help contributed to Nebraska’s unprecedented income progress, he mentioned. Because the begin of the COVID-19 pandemic, the federal authorities has contributed billions of {dollars} to Nebraska, however that help not too long ago has tapered off. 

“That is gonna be the massive problem,” Bergquist mentioned. 

The excellent news is even when state revenues drop in upcoming years, Bergquist mentioned he expects Nebraska’s future budgets shall be superb. The additional income will add to the state’s money reserve, which already was anticipated to hit a file excessive of $1.25 billion by the tip of subsequent June. Now, the reserve is anticipated to be nearer to $1.69 billion.