Nebraska tax revenue falls 10 percent short of projections in June; consumer spending lagsBy Nate Jenkins, AP
Friday, July 9, 2010
Neb. tax revenue in June comes in 10 percent short
LINCOLN, Neb. — Nebraska tax revenue dove in June, falling 10 percent below official projections after May figures seemed to signal an economic rebound, according to a report issued Friday.
Net tax revenue for all four categories of state taxes lagged projections including sales taxes — a measure of how much consumers are spending, said the report for June by the state Department of Revenue. Sales tax revenue was nearly $11 million below projections for the month.
“June receipts are further evidence of a bumpy road to a broad economic recovery,” Gov. Dave Heineman said in a statement.
Already sluggish tax receipts were further dented by higher-than-projected tax refunds primarily given to businesses under the state’s job-growth policies. The refunds were 16 percent higher than projected, totaling $57 million for the month.
Gross, corporate income tax revenue was the lone bright spot in the report, exceeding the official revenue forecast that sets the baseline for the state budget by nearly 13 percent. But after refunds were added, net corporate taxes were nearly 8 percent below the forecast.
Altogether, the state ended the fiscal year with $76.4 million less than what was projected by the Nebraska Economic Forecasting Advisory Board in February. The board meets again this fall to revise its revenue projections.
State Sen. John Wightman of Lexington, who is on a committee that considers whether to recommend special legislative sessions on budget issues, said Friday that a special session doesn’t currently appear necessary, but that could change based on future revenue figures.
Another member of the committee who is also chairman of the state’s budget-writing Appropriations Committee agreed a special session wasn’t needed now, adding that the state doesn’t have cash-flow problems and likely won’t because of a 3 percent cushion built into the state budget.
“It’d have to start to get pretty ugly,” for that cushion to be insufficient, said Sen. Lavon Heidemann of Elk Creek. If it was, the state could lean on a cash reserve account.
At least one state senator believes a special session is needed to get a head start on spending cuts before lawmakers craft the next two-year budget during the regular session that starts in January. The state could have to close a budget gap during that two-year cycle of roughly $680 million.
“The longer we go without solving this, it only makes next year’s budget problem worse,” said Sen. Heath Mello of Omaha.
Revenue Department report: www.revenue.ne.gov/research/gen_fund/nr0710.html
Tags: Lincoln, Nebraska, North America, United States