Nebraska state revenues start fiscal year $10 million above projections
Nebraska state government just posted its first revenue report for the new 2021-2022 fiscal year and the results are positive. Net revenues for the month of July were above the forecasted amount by 3.2% or $10 million. All major tax sources posted collections ahead of projections except for the personal income tax, which was 26.5% or $27 million below the forecasted amount.
The other good news is that this is the first month when LB180 goes into effect. Now, the actual revenue collection figures from the previous year are included in the release to give additional context.
LB180 requires the Tax Commissioner to amend the monthly revenue report to include the most recent forecast, not just the certified forecast, as well as comparing it to the same month for the previous fiscal year. The Platte Institute supported this piece of legislation in written testimony.
When compared with actual collections from the year prior, there is a huge difference. July 2020 revenues were over $605 million while July 2021 collections were $311.6 million.
Why the almost 50% difference in the two months?
July 2020 was still early in the COVID-19 pandemic and the tax filing deadline had been extended to July 15. Many people lost their jobs and waited until the final hour to file their income taxes, thus pushing a significant amount of revenue into a month that normally does not see that much in tax collections.
This means the comparisons of revenues for 2021 to 2020 will be a bit “off” for the next few months until the comparisons are back to somewhat more normal times.
The next General Fund revenue report will be released on Wednesday, September 15 and the next Revenue Forecasting Board Meeting will be at 1pm in Lincoln on Friday, October 29.