Nebraska's economy finished its fiscal year strong, and will be able to build up its rainy day fund to more than $500 million in the next year.Ìý
The state's Tax Rate Review Committee learned Thursday that $176.4 million will be added to the state's cash reserve in the 2019-20 fiscal year as a result of tax revenue coming in above the forecast by the Nebraska Economic Forecasting Advisory Board.Ìý
"Revenue above forecast was actually very good in all categories," said Tom Bergquist, the legislative fiscal office director. Those categories are tax collections for sales, individual income, corporate income and miscellaneous.
The state collected $4.9 billion in net general fund taxes in 2018-19, 3.7% above the certified forecast of $4.7 billion. The fiscal year ended June 30.
Adjusted revenue growth was 8.7%, Bergquist told the committee, made up of Speaker Jim Scheer, Executive Board Chairman Mike Hilgers, Revenue Committee Chairwoman Lou Ann Linehan and Appropriations Chairman John Stinner.
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That growth compares to 5.7% calculated in April.Ìý
"That's some of the highest we've had in quite a while," Bergquist said.
The bump in revenues prompted Gov. Pete Ricketts to say the strong financial position, with substantial revenue growth in the past few months, should set Nebraska on a path to more property tax cuts.
"As Senators and I work together over the summer, this is a big opportunity to leverage our state’s growth into significant property tax relief for our farmers, ranchers, and homeowners,†Ricketts said this week in a news release.
Stinner said Thursday he was optimistic about the report. It takes some pressure off the lowering of the rainy day fund last fiscal year to $333.5 million.
Still, he added, "I'm not ready to say, 'Hey, we're headed on a very positive, aggressive course right now.'"Â
The committee speculated about why the state got such a bump in revenue in recent months. It's likely to be a one-time shot, especially in the increase in corporate income taxes, Bergquist said.Ìý
Part of it could be an increase in sales taxes collected because of spending resulting from flooding in the state. People had to spend for cleanup, repairs and to replace possessions destroyed by that flooding.
Other reasons could be from capital gains on individual income taxes and federal tax cuts, said state Tax Commissioner Tony Fulton.