Nebraska tax revenues down in April, could bounce back in May, analyst says

(The Center Square) – Nebraska tax revenue was slightly below the projections reported for April, with revenue of $525 million, about 1% below the forecast of $528 million, the state reported.

Corporate income taxes, sales and use taxes and miscellaneous taxes were higher than expected, but individual income taxes were lower, the report said.

The lower numbers are partially due to the state extending the tax-filing deadline to May 17, which was in line with an extended federal deadline, Craig Beck, fiscal analyst for the nonprofit OpenSky Policy Institute, said.

“We don’t think it’s anything to be concerned about,” Beck told The Center Square.

Although April numbers were lower because of the extended tax filing deadline, May numbers should be higher, Beck said.

“But it remains to be seen if that will make up the difference from April’s lagging receipts,” Beck said. “The only thing that would happen if we aren’t able to make up for April’s receipts in May and June is that the transfer to the cash reserve at the end of the fiscal year, as well as the growth in the LB 1107 refundable income tax credit, will be smaller.”

Legislative Bill 1107, passed last year by the Legislature, provides a state income tax credit for property taxes paid for local schools. The amount of the tax credits are based on a formula tied to the state’s financial health. When the state’s reserve fund reaches $500 million, surplus revenue would increase the tax credits. The reserve fund could increase to $763 million under the budget currently under consideration by the Legislature, the Norfolk Daily News reported in April.

So far this fiscal year, which ends June 30, Nebraska tax revenue is still exceeding projections.

The state has collected $4.66 billion in taxes, 13.6% above the $4.1 billion predicted.

The projections were made last July by the Nebraska Economic Forecasting Advisory Board.

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