Sluggish state tax revenues aren’t getting any better. In fact, the Nebraska Economic Forecasting Advisory Board believes they are getting worse.
The board has adjusted downward its revenue estimate, now projecting the legislature will have to take further steps to close a projected $288 million gap.
Gov. Pete Ricketts says state government will have to cut the budget even more.
“Demonstrates we have to have continued fiscal restraint by all state funded entities,” Ricketts tells Nebraska Radio Network. “Everybody has got to be part of the solution here and I’ll continue to work with Sen. (John) Stinner who is chairman of the Appropriations Committee and the entire Appropriations Committee and legislature on ideas on how we can tackle this. I will not support any attempt to raise taxes. We have got to do what our farm and ranch families do when they see their income go down. They cut their spending and that’s what we have to do as well. We are going to tighten our belts.”
The Unicameral has already approved $137 million in budget cuts suggested by Ricketts in the current fiscal year. The Appropriations Committee will suggest further cuts, but now will have to cut a bit deeper to align spending with revenue.
Ricketts says he and legislators received a foreshadowing of the revenue forecast during November and December, when state revenue dropped by a total of $54 million.
“So, we’re not surprised that this is what it was looking like and that’s why we have been encouraging people to control their spending and that’s why we’ve offered up the budget cuts that we have,” Ricketts says.
The forecasting board worries about the farm economy, with commodity prices still in the doldrums. It does expect additional revenue to flow the state’s way from purchases from the online giant Amazon, which has begun collecting state sales taxes on purchases.
Ricketts says state government will suffer until commodity prices rebound enough to raise farm income.
“And so when we see commodity prices start turning around, I think we can feel better about where the direction of the state revenues will go,” according to Ricketts. “But until we see that, I think we’ve all got to prepared that we are going to have to tighten our belts, control our spending and do what we can to be able to make sure that we don’t raise taxes on anybody.”
State lawmakers faced a potential $900 million revenue shortfall for the upcoming two-year state budget when they convened in January. Budget cuts combined with lower expected expenditures closed the gap somewhat.
The forecasting board projects revenues for the next two-year budget to total $9.25 billion.