Nebraska Economic Forecasting Advisory Board revises state tax revenue projections

The Nebraska Economic Forecasting Advisory Board increased its projections for state tax revenue in the upcoming year, but the board is less optimistic about fiscal year 2025.

The board now projects Nebraska will collect $6.445 billion in state tax revenue between July 2023 and June 2024.

That represents an increase of nearly $8 million from the previous projection set in April 2023.

Board members cited continuing inflation and economic growth as reasons for increased state tax revenue.

However, the board revised its state revenue prediction for fiscal year 2025 downward by more than $13 million, or 0.2 percent of the total revenue projection.

Hoa Phu Tran with the Nebraska Department of Revenue said recession fears have cooled, but post-pandemic growth is unlikely to continue at the same pace.

‘Personally I don’t think there will be a recession here now, but slow growth is definitely the likely outcome.” he said

Board member Steve Seline said he anticipates higher inflation and interest rates to continue for 2024, boosting Nebraska’s short term tax income.

“Since inflation actually benefits our Nebraska revenues, we are in a situation where the state tax coffers are likely to benefit from that,” he said. “And I would expect that the interest rates will stay high.”

Board chair Rich McGinnis also said future meetings would now have an opportunity for public comment.

“Any member of the public that attends a meeting has an opportunity to address the board, in this case NEFAB,” McGinnis said. “So we need to make it more open that people have the right to do that.”

The next board meeting is set for February 29th, 2024.