State tax receipts hit the mark projected by forecasting board

LINCOLN — State tax receipts finished the fiscal year in the black, barely beating the projections of a state advisory board and sending an extra $3 million to Nebraska’s rainy day fund.

General fund receipts for the 2022-23 fiscal year came in at $6.37 billion, within 0.05% of what the Nebraska Economic Forecasting Advisory Board had projected in April.

State Sen. Lou Ann Linehan of Omaha, chair of the Legislature’s Revenue Committee, said getting a projection that close is “like getting a 37 on the ACT.”

“To be that close is amazing,” she said of the forecasters. “They had to kind of swim against the waves because they were kind of told and guided in a different direction.”

The final tally rebounded from recent economic trends that tightened toward the end of the 2023 legislative session. The change was fed in part by June receipts that jumped 9%.

Gov. Jim Pillen celebrated the “great news.” He said the state would “continue to work with state agencies to constrain spending” and make room for the tax relief the Legislature passed.

“Those measures, combined with the increase in tax receipts, bode well for the stability of our state’s economy,” Pillen said in a statement Friday afternoon.

Critics of a massive tax relief package the Legislature passed, which is set to start kicking in, said it is too soon for Pillen, a former Husker, to spike the football.

Rebecca Firestone, executive director of OpenSky Policy Institute, a progressive local think tank, said tax collections above projections are a good sign of the economy’s resilience.

But she said cuts to income tax rates and new state spending to offset local property taxes, plus one-time spending out of the state’s cash reserve, could put Nebraska in a pinch.

“Lawmakers removed some of the cushion available for a potential economic downturn,” she said in a statement. “As a result, paying for the tax cuts passed in 2023 without impacting state services remains a concern.”