State tax receipts finished the fiscal year strong with a robust June.
Gross General Fund receipts for June totaled $457 million, 10.2% above the forecast, according to the Nebraska Department of Revenue. The numbers held up even with tax breaks and refunds factored in. Net General Fund receipts last month totaled $390 million, 7.7% above the forecast certified by the Nebraska Economic Forecasting Advisory Board.
Net Sales and Use tax receipts came in 5.1% below the forecast in June, but finished the fiscal year which ended June 30th nearly on the money; only 0.3% off the forecast. Net individual income tax receipts came in 12.9% above the forecast in June, with net corporate income tax receipts coming in 19.8% above the forecast.
All those numbers add up to one very large number: more than $4 billion dollars in net General Fund receipts for the 2012-2013 Fiscal Year. That total is 7.6% above the forecast of $3.76 billion.
“We have an ever-increasing recovery going on out there in the economy,” State Tax Commissioner Doug Ewald tells Nebraska Radio Network. “We are consistently improving across all facets when you look at all these tax categories. So, I think that is a strong item for the state of Nebraska. It is very positive for us.”
Ewald though remains cautiously optimistic even when viewing the strong numbers.
“I am very optimistic with what it is, but we need to temper that based on what some of the one-time stuff that we saw last year,” according to Ewald.
Ewald suspects that some Nebraska taxpayers dumped anything that might have incurred a capital gains tax at the end of last year, fearing that the capital gains tax rate would jump at the start of the New Year. Those fears never materialized, but the state likely reaped a bit of a windfall as taxpayers hedged their bets.
The strong revenue numbers should increase the state cash reserve to around $679 million, according to Gov. Dave Heineman’s office.
“With the largest cash reserve that the State has ever had and a consistently improving economy, it is time to provide the citizens of Nebraska tax relief. Tax relief should be the top priority of the next Legislative Session,” Heineman said in a written statement released by his office.
Tax reform is on the mind of Appropriations Committee Chairman, Sen. Heath Mello of Omaha.
“The fact that actual receipts exceeded expectations reinforces that the Legislature made thefiscally responsible decision to rebuild the cash reserve this past session. As we discussed during the budget debate this year, I anticipate the Legislature utilizing the cash reserve for responsible tax reform proposals next year,” Mello said in a written statement released by his office.