The Nebraska Tax Rate Review Committee that is made up of a number up of state senators met Tuesday. They meet several times a year to determine if the state’s tax rates need to be changed. They look at a budget, the revenue forecast, and general fund financial status to make an assessment on whe3ther there will be a surplus or deficit in the upcoming session.
It was determined that Nebraska is sitting on a $413 million surplus. That is before additional costs that include increased salaries for corrections workers and other growing obligations.
Renee Fry is the executive director for OpenSky Policy Institute and tells KLIN News, “The one thing we need to be careful of is the federal dollars that have come in and those are really propping our economy up. States across the country are seeing the same trend. That is great news but we want to make sure we don’t obligate ourselves into the future and come up with tax cuts or new spending items that put us in a situation so when those federal funds run out we can’t cover our bills.”
Fry says there has been a $20 billion infusion into the Nebraska economy through the CARES Act, PPE loans, the American Rescue Plan, and child care tax credits. That has helped get us through this pandemic instead of a recession. That money isn’t permanent and will be going away. She says, “We need to be cautious we don’t obligate ourselves and when those dollars run out we don’t have significant deficits we need to close. That is when we will have to make really really hard decisions.”
Fry says this is a once in a lifetime opportunity and we need to use fiscal prudence right now until we know what the future looks like.