With October revenues up, state should save money or return to taxpayers
It is important to note from October’s revenue report that corporate income taxes are way above their forecast amount. This is because this tax is unreliable and could very easily be below forecast in the upcoming months.
Another thing to point out is that all these tax revenues are above forecast, which means the state is unnecessarily taking money out of the private sector that would be otherwise growing Nebraska’s economy. Economists have proven that government spending does not stimulate private sector activity, so it is better to leave these dollars where they can create the most growth.
On the flip side, many financial analysts are predicting a recession in the upcoming months/year. So, if the state is not going to enact tax reform and return these dollars to the private sector, then the money should be moved into the state’s rainy-day fund to hedge against a recession.
In short, Nebraska does not need to find ways to SPEND this revenue, instead, it needs to be returned to the citizens so it can be invested and grow, or it needs to be saved for a future economic downturn.
The October net receipts for the state were released today and were $290 million (8.8%) above the certified forecast.
|Sales Tax||2.4% below forecast|
|Personal Income Tax||8.6% above forecast|
|Corporate Income Tax||282% above forecast|
|Miscellaneous Taxes||15.2% above forecast|
For the fiscal year, which runs July 1, 2019 to July 30, 2020, the net General Fund receipts are $1.589 Billion, which is 6.7% above the certified forecast.
|Sales Tax||3.7% below forecast|
|Personal Income Tax||3.0% above forecast|
|Corporate Income Tax||62.7% above forecast|
|Miscellaneous Taxes||6.0% above forecast|
For the complete report on General Fund tax revenues, click here.