Jump in Nebraska's revenue expectations might alter lawmakers' tax plans
A jump in Nebraska's anticipated revenues has state lawmakers weighing what that might mean for tax plans currently on the table.
Lawmakers are considering raising the sales tax and taxing some items currently exempt in exchange for property tax relief and a more fair way to get money to our public schools.
Under the proposal, homeowners are supposed to get a 10-percent tax break on property. So if you're paying $1,000 in property taxes, for example, you'd save $100.
Most would consider that a good thing but none of us know how the other changes will impact our lives, yet.
First -- the good news from Lincoln.
Sen. Lou Ann Linehan, of Elkhorn, said, "This morning we learned from the forecasting board some good news: we're going to have more money than we thought. So maybe we don't have to have as much revenue as we think we do. That will be a major change."
That's $50 million in revenue the state wasn't counting on.
So what could happen to the current plan because of that? We’re told that perhaps it could lower the proposed increase in the sales tax.
Here's how. Right now, the state sales tax is 5.5-percent so on $100 item we pay the state $5.50. As it stands, that would increase to 6.25% or $6.25.
We’re told with the extra money, perhaps the state won't raise it as much – perhaps just 6 percent or 5.75 percent.
Nebraska Revenue Forecast
LINCOLN, Neb. (AP) - Nebraska government's rainy-day fund will get a boost in tax revenue this year, based on new projections, but lawmakers still face a lot of uncertainty as they work to pass a new budget.
The Nebraska Economic Forecasting Advisory Board predicted Thursday that the state will collect an additional $45 million in the current fiscal year, which ends June 30. State law requires that money to into Nebraska's cash reserve, or rainy-day fund.
Sen. John Stinner, the Appropriations Committee chairman, says the extra money will help after several years of tapping the fund to compensate for lower tax collections.
Board members also predicted a $10 million boost in the next fiscal year, but held the following year flat.
Gov. Pete Ricketts say the money should be used to lower property taxes.