Nebraska’s tax receipts for the 2023-24 fiscal year released Monday came in 0.1% below the most recent projections. In the past year, the State of Nebraska collected $7.156 billion for the state’s general pocketbook, about $10.6 million below a Feb. 29 forecasting projection. The reported general fund tax receipts include net sales and use taxes, individual income taxes, corporate income taxes, and miscellaneous taxes.
Gov. Jim Pillen said the receipts give momentum to his efforts to offset local property taxes, which will be aided through additional state spending cuts “to run the state like a business.” “That feeds into our most immediate goal of fixing the state’s property tax crisis in the upcoming special session,” Pillen said in a statement. The special session is tentatively to begin July 25.
State Sen. Danielle Conrad of Lincoln cautioned there is more to the story after “eyebrow raising” receipts from corporate income and individual income in the past few months. She said that’s largely because of 2023 legislation that changed how big corporations handle their taxes. Fiscal analysts “woefully underestimated” how many people would use those changes, Conrad said, leading to large percentage differences between projected and actual receipts:
- 858.8% more corporate income receipts for May.
- 231.7% less individual income receipts for April.
- 1,206.35% more individual income receipts and 248.3% more corporate income receipts for March.
“It kind of artificially propped up our general fund receipts,” Conrad said, saying the taxes would come to a “new normal” pretty quickly. Conrad cautioned that on top of major income tax cuts last year, taxpayers nationwide appear to be making fewer purchases, indicated by smaller sales tax receipts.
Lease and Tax Receipts
The governor’s draft plan for property tax relief, obtained over the weekend, indicates sales taxes are a key part of his suggested solution, which Conrad criticized for various reasons, including that the taxes are “less stable and more volatile.” “When he’s out there trumpeting for political purposes, ‘Receipts look great, let’s get moving,’ that’s very political,” Conrad said. “That’s a very political lens that shouldn’t come into play in regards to our budgeting process, which has always been very conservative and very sound.”
State Sen. George Dungan of Lincoln, a member of the Legislature’s Revenue Committee, said the data doesn’t reflect that lawmakers transferred nearly $200 million from the state’s “rainy day” fund to its general fund, in part to pay for future obligations. “I think it would be a mistake to rely on those numbers in making major decisions without taking into account the entire story,” Dungan said in a text.
State Sen. Lou Ann Linehan of Elkhorn, the Revenue Committee chair, meanwhile agreed with the governor that because the state took in more than $7 billion, “it’s amazing how close the projections are.” She said there is momentum to provide more tax relief. “Obviously, I’m pleased. It’s nice to be that close because it’s really not an exact science,” she said. “I think we’re in a very strong financial position.”
