Nebraska lawmakers right to be cautious of revenue projections
A recent Rockefeller Institute State Revenue Report indicates that much of the recent uptick in state revenues around the nation is likely to be temporary.
“Year-end actions by taxpayers to minimize their expected federal tax liability in light of the ‘fisca
l cliff’ and federal actions to avert the cliff are likely to boost state income taxes in the October-December quarter and in the first and second quarters of 2013, lifting state tax revenue in the 2012-13 state fiscal year,” the report stated.
However, the report noted, the year-end actions likely will decrease state income tax revenue slightly in 2013-14 state fiscal years.
“States are on a revenue roller coaster, and there is a bumpy ride ahead,” the report read. “It will be hard for states to interpret revenue data in coming months, and hard to rule out the possibility that any short-run revenue surge is simply borrowed from the future.”
Last week, the Nebraska Economic Forecasting Advisory Board announced that the state could experience a budget surplus of more than $81 million.
That Appropriations Committee members responded to the forecasting board’s report with cautious optimism and that the Legislature’s Executive Board voted to send LB 613 – a bill by Sen. Paul Schumacher that would create a tax reform commission – to the main legislature floor for full debate are good signs for Nebraskans.
These actions show that Nebraska lawmakers are working cautiously and deliberately to make sure the state has solid and sustainable revenue sources to best meet its needs.