LINCOLN, Neb. (AP) – Nebraska lawmakers will have nearly $500 million in additional tax revenue available for spending or tax-cutting measures this year, plus a record $1.7 billion in the reserve fund. state cash flow, based on new projections approved on Monday.
The Nebraska Economic Forecasting Advisory Board predicted a sharp increase in tax revenue in the current fiscal year from its previous October forecast.
The board approved the new estimates despite huge uncertainty over inflation, global supply chain issues, a statewide labor and housing shortage, and the escalating Russian conflict in Ukraine. all of which could rock Nebraska’s economy. The increase was largely due to the trillions of federal pandemic aid injected into the US economy.
“Since I have been a member of the board of directors, this is the greatest uncertainty that I can remember,” said chairman Jérôme Deichert.
According to the revenue forecast, Nebraska is expected to collect nearly $5.73 billion in taxes in the current fiscal year, which ends June 30. This represents a 10.7% increase over the council’s previous estimate of an additional $370 million.
People also read…
For the following fiscal year, board members projected tax revenue of $5.96 billion, which would represent a more modest increase of 3.2% over previous estimates for that year. This would represent an additional $405 million.
Rising state revenue could fuel demand for tax cuts and other spending wishes, including major water projects backed by Republican Gov. Pete Ricketts and hand aid programs -work destined for Omaha. But some lawmakers who faced a $1.2 billion budget shortfall just a few years ago said they wanted to stay cautious and not overspend.
“When the stimulus ends and the normal economy comes around, what will we look like?” asked State Sen. John Stinner, chairman of the budget drafting committee.
Stinner, of Gering, said he still expects many lawmakers and special interest groups to push for a cut in the money.
“It’s going to be a food fight,” he said.
Forecasting board members said Nebraska’s economy appears to be roaring with the nation’s lowest unemployment rate and high agricultural commodity prices. But they also expressed concerns about businesses struggling to hire and grow due to severe labor shortages and a lack of affordable housing.
Board member John Kuehn, a former state senator, said he sees growing frustration among many residents over rising fuel costs and global shortages that have made it more difficult to purchase of a car or new agricultural equipment. Kuehn said pandemic relief has boosted the economy, but it’s unclear when the financial “sugar spike” will end.
Board member John Bourne said Nebraska is in the midst of a building boom, but building materials and labor are hard to come by and some projects are now on hold. postponed. Another board member, Zac Karpf, expressed concern that Nebraska’s unusually dry winter will likely lead to drought that will hurt agriculture, the state’s biggest industry.
And board member David Ochsner said many banks are sitting on large amounts of idle cash due to supply chain shortages and the resulting difficulties in buying a new home or apartment. new tractor.
“Interesting times, to say the least,” Bourne said.
Follow Grant Schulte on Twitter: https://twitter.com/GrantSchulte
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.