State revenue came in a bit stronger during the last fiscal year than expected and just right according to the legislature’s Appropriations Committee chairman.
The state closed the books on the 2013-2014 fiscal year June 30th with $4.117 billion in state revenue, 2.4% better than the forecast of $4.021 billion.
Sales tax revenue came in 1.7% above forecasts and individual income tax receipts were one percent higher than forecast.
Corporate income tax receipts surged to nearly 16% above the forecast, though corporate tax receipts do not bring in nearly as much money as the sales tax and individual income taxes.
Miscellaneous taxes came in better than four percent above the forecast.
The cash reserve fund is $687 million.
Appropriations Committee Chairman, Sen. Heath Mello of Omaha, notes cash reserves settled right around the 16% mark the Unicameral prefers.
“We really based this 16% of General Fund revenue off of historical averages and historical forecasting errors as it relates to the state enduring in the last few recessions,” Mello tells Nebraska Radio Network.
Mello explains that, traditionally, Nebraska experiences about a 4% hit on state revenue for each of four years during a recession. The cash reserves are designed to get the state through a national economic downturn.
It will be used for more than that next year.
Mello points out a few bills will be coming due in the next year. The state will pay a $15 million penalty for mishandling federal child welfare money. A $5.5 million settlement will resolve Nebraska’s lawsuit with Kansas over use of water under the Republican River Compact.
Mello also estimates that the miscalculation of prison sentences by the Department of Correctional Services might cost the state between $25-and-50 million in added expenses.
Still, Mello says there’s enough money to meet needs and have a cushion.
“I think something that the taxpayers across the state can feel good about is that the legislature took a responsible, cautious approach that both reduced their taxes and mitigated potential future tax increases by protecting the state’s rainy day fund.”
AUDIO: Brent Martin reports [:50]