Now
Fair
71°
High
77°
Low
54°
Full Forecast

Jobs

Cars

Homes

Rentals

Alerts

Subscribe
Home > News > Local
Bookmark Us   •   Make Us Your Homepage

State's reserve account overflowing

Comments 27 comment(s)  
E-mail Story E-mail Story
Print Story Print Story
Share  Share
Text Size: 
Tools Sponsor

By NANCY HICKS / Lincoln Journal Star

Wednesday, Jul 23, 2008 - 06:08:40 pm CDT

Nebraska’s legislative leaders  won’t speculate about the reasons for higher-than-expected tax revenues.

Wait until October, said Speaker Mike Flood and Appropriations Committee Chairman Lavon Heidemann.

The state will have better information on the income tax revenue this fall after the federal government releases its analysis. In addition, the state’s forecasting board will provide new revenue projections on Oct. 31.

Story Photo

“It’s too early to tell. Let’s see what the October forecast tells us,” said Flood.

One thing is clear, personal income tax revenue is the driving force behind this past fiscal year’s revenue growth.

Personal income tax revenue grew by 11 percent, and accounted for $96 million of the $117 million in surplus at the end of the year, according to a report given to a special legislative committee Wednesday.

But whether that growth is from farm income, capital gains or something else remains unknown.  

The personal income growth reflects income earned in 2007 and paid in 2008, said Mike Calvert, chief fiscal analyst for the Legislature.

That growth is not an indication of the economy in 2008, he warned.

Nebraska is among a small group of states with higher-than-expected tax revenue and no serious financial problems.

Nebraska’s general fund revenue grew by 2.9 percent last fiscal year, which ended June 30. That slow growth was the result of income tax cuts made by the Legislature and governor in 2007.

The committee meets once a year to make sure there will be enough state tax revenue to meet state obligations during the next six months.

The committee has the authority to recommend a special session if the state faces serious financial problems.

There is no reason for a special session with $3.5 billion in general fund revenue and a $570 million cash reserve.

But the report to the committee did indicate the state will be in the red in two years if state spending continues to rise at its current rate.

That prediction assumes the Legislature and governor will continue a two-year property tax refund program.

That program provides a property tax credit of about 8 cents per-$100 valuation, or $80 a year for the owner of a home valued at $100,000. The credit costs about $115 million a year in state tax revenue.

Senators and the governor  said the property tax credit program would continue after two years only if the economy was strong.

Neither Flood nor Heidemann would comment on the possibility of continuing that property tax cut.

“That (property tax decision) will be a lot clearer in October,” and after the forecasting board meetings in February and April, Heidemann said.

“We knew that (the property tax rebate program) was subject to the ups and downs of the economy,” Flood said.

Senators at the meeting also suggested the Legislature will need to be cautious about state spending next year.

Flood specifically mentioned high gas and food prices.

“People are hurting in this state,” he said.

Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.


$1 Sunday Delivery - Subscribe Today!
Local > Back to Top of Story

Post Your Comment

Standards and Rules
All posts to JournalStar.com are subject to our Terms and Standards.
Your posted comment will appear after it has been approved.
Frequently asked questions about story commenting.
(optional)
   
Hide Comments Hide Comments   Newest First Newest First  
Lets Give it Back wrote on July 23, 2008 9:50 am:
" Some of the Legislature decided we should pay more in gas taxes last year instead of spending some of this reserve.

How about a second round of tax relief to match or exceed the largest tax relief in the history of the state ($400 M) to match 2007s tax cut package?

Funny how the Legislature cut taxes and provided property tax relief and our economy is growing leaps and bounds compared to other states. That voodoo economics must be working its magic. "

 Lincolnite wrote on July 23, 2008 9:54 am:
" SAVE IT. Don't "decide what to do with it". SAVE IT. Save it for those years such as not long ago when the state either "spent more than forecasted" or "earned less than forecasted". Stop "forecasting" and just try to have as lean of a budget as possible ... and everything will always work out. Always. SAVE IT. "

 Jack wrote on July 23, 2008 10:04 am:
" Local governments, other than schools, sure could use some financial help. How about it, big brother State of Nebraska? "

 GT wrote on July 23, 2008 10:10 am:
" So does this mean I will be getting some of MY money back from these extortionists, oops I mean Senators. Of course it will just be funneled through me to LES. "

 Barb wrote on July 23, 2008 10:10 am:
" I thought the state, city and county were broke....amazing..someone needs to get their stories straight and stick with it...you know.."That's my story and I am sticking to it!" "

 Spend it or give it back wrote on July 23, 2008 10:17 am:
" The message I keep hearing about the reason why our cash reserve is so high is because "soon the sky will fall on us and our state government will be in a deficit." Well, I'm wondering when because I'm getting pretty annoyed that our state leaders are essentially supporting corporate welfare and don't seem to care so much about the welfare of ordinary Nebraskans. Why doesn't our state senators just give the money back to us so then we can pay our bills? Oh wait, I forgot...the sky is going to fall. "

 overtaxed wrote on July 23, 2008 11:51 am:
" proportionate income tax refund as a credit against 2008 return "

 Mike wrote on July 23, 2008 1:28 pm:
" Great, now lets start funding the roads so that we can get around in this state without a construction zone every mile. "

 ba ba booey - fla fla flo hie wrote on July 23, 2008 1:28 pm:
" would be a good idea to buy everyone a sirius radio with this money! "

 Pete Beau wrote on July 23, 2008 2:28 pm:
" When the State can talk about a tax cut I wish they would consider this one. Make the first $100.00 of utility bills subject to no sales tax.I know the cost to the State must be clculated but think of the financial benefit to those on the lower end of the economic spectrum.Why do we exempt food? The logic is that every family needs food an bcause of the universal need we have decided to exempt food..I think the same can be said for utilities.. "

 Fix the infrastructure wrote on July 23, 2008 2:57 pm:
" Don't cut taxes. Fix the roads and bridges that are failing. "

 Eight ball wrote on July 23, 2008 3:11 pm:
" Maybe Mr.Calvert needs to shake up his magic eight ball again for another forecast...."outlook cloudy"?? How about this...property tax relief this time you know not some phony idea to allow cities to increase the lid limet but tax relief to property owners! How about eliminating the .10 tax on nonethnol gas to subsidze ethanol or how about cutting the BILLION dollars we spend on K-12 education in this state...we only have 500,000 school kids..the list of state waist is endless. How about an audit of third party state contracters or preformance aduits of HHS. How about increasing Mr.Foley's budget...he seems to be one of the few that actually get's anything done! Maybe spending money on ROADS and quit taking gas tax money to fund schools! Or you could reduce car sales tax's by half and watch the folks properly redigestar their cars in the state where they live also you wouldn't have to spend money to "catch" them...what did that cost? "

 Wally wrote on July 23, 2008 3:21 pm:
" Cut the rate of auto taxes. "

 Well wrote on July 23, 2008 4:25 pm:
" Did you read the article? They DON'T KNOW whether they are coming or going
so they just spend spend spend and say oops we didn't spend enough!!!
Sure glad the company I was a CPA for didn't operate like that!!! You can
bet what bottom dollar ya have left they dump it into the schools!!!!!!
Surely the schools will find a building to tear down and build a new one
and buy a few more million laptop top of the line computers!!!!!! Just
forget it, they aren't giving you a dime back!!!! "

 Galen wrote on July 23, 2008 4:31 pm:
" If tax cuts are in order they should be in the area of PROPERTY TAX relief, not income tax. "

 Husker Joe wrote on July 23, 2008 5:55 pm:
" I say that the state buys everyone in the state of Nebraska a ticket to a Husker football game that they want to go too. I would like to see NU play Va tech. Thanks Gov. Dave! "

 whatever wrote on July 23, 2008 6:21 pm:
" Save most of it, refund some of it and invest in rebuilding infrastructure in this state. The ag economy has another 12 to 18 months of a "good run" that's why we are seeing the increase in revenue. Nationally the economy ain't so great and in isolated areas in Nebraska such as Lincoln it ain't too great. But where my family sits we are looking at a 15 to 20 percent increase in household income over last year. Same sort of thing for my "neighbors". There is all the work in the world and more opportunities are coming. "

 DOC wrote on July 23, 2008 8:23 pm:
" Okay Class, let's not get too excited yet. We still may have to pay Kansas for our water bill. We have some roads that will need repairs. Everyone seems to want to see an adjustment in the car license fees. We know that property tax is not a great way to collect taxes, because you have to pay them even if you are having a rotten year. So we need cooler heads and a lot of study before act. This might be a trend or a flash in the pan. Let's find out which before we spend it all. "

 eric wrote on July 23, 2008 8:56 pm:
" Isn't it amazing how the state can be making so much money but the city of Lincoln seems to be broke????? "

 Mark wrote on July 23, 2008 10:19 pm:
" Like other posts, I agree: SAVE SAVE SAVE "

 huskerbohonk wrote on July 24, 2008 2:02 am:
" From the article: "Nebraska is among a small group of states with higher-than-expected tax revenue and no serious financial problems."

This could be a great opportunity for us. Many highway and bridge projects are mostly federally funded with the STATE required to pay a small percentage of the total cost. Since many other states are hurting for cash, the competition for the federal dollars could be less than at other times. We are in a good financial position to go after the federal matching dollars and INVEST the money in the aging infustructure of our state. "

 reserve while others scrape by wrote on July 24, 2008 7:41 am:
" 570 million in cash reserve? but how many state employees work 2nd and 3rd jobs just to make ends meet? time to give them a real raise "

 More wrote on July 24, 2008 7:50 am:
" DOC mentions roads and water. Don't forget about salaries of state employees, moving the State Fair, state education assessments, (have the state pay for the laptops instead of local districts) and promoting Nebraska through tourism and employment. With today's technology, you can live almost anywhere and still 'work' via the internet opportunities. Living in Nebraska is still cheaper than the coasts and most metropolitan areas. Let's promote Nebraska! "

 Windy wrote on July 24, 2008 8:00 am:
" Let's coat the western third of the state with wind farms and sell the electric to the energy hungry west. We can all retire! "

 crazy idea wrote on July 24, 2008 9:47 am:
" How about simply giving it back to the PEOPLE whom the state overcharged in the first place? "

 Fix BSDC wrote on July 24, 2008 11:04 am:
" If the governor was doing his job, a big chunk of that $$ would be going to fix problems at BSDC. Our state has let down it's developmentally disabled citizens. Guess the governor doesn't care about citizens who don't typically vote? "

 The tax cuts didnt do it wrote on July 24, 2008 11:16 am:
" I love these people saying this is because of the tax breaks. The tax breaks had very little if anything to do with the surplus. Read the article - $96 million of the $117 million is due to an increase in personal income taxes. How do property tax cuts increase personal income taxes? Additionally we havent even seen the tax cuts yet - they will be on our property tax bills this year. "

Ads by Yahoo!