Nebraska’s General Fund tax receipts exceeded projections in August, ending five consecutive months in which monthly revenues fell short of forecasts.
The Nebraska Department of Revenue reported net General Fund receipts of $653 million for August, about $7.6 million, or 1.2%, above the $645 million forecast. Gross receipts totaled $765 million, 1.3% above forecast, while tax refunds totaled nearly $112 million—about $2.2 million higher than projected. Details from the Nebraska Department of Revenue are available here.
The improvement was overwhelmingly attributable to sales and use taxes. Net sales and use tax receipts were $253.8 million, approximately $35.1 million, or 16%, above forecast.
Other major revenue categories missed their monthly projections. Net individual income tax receipts were $10.1 million, or 2.7%, below forecast; corporate income tax receipts were $6.3 million, or 41.6%, below forecast; and miscellaneous taxes were $11.1 million, or 27.9%, below projections.
Fiscal year now slightly ahead of forecast
The August numbers put Nebraska slightly ahead of its revenue forecast through the first two months of fiscal year 2026-27.
Net General Fund receipts since July total $1.026 billion, approximately $7.2 million, or 0.7%, above the forecast of $1.019 billion. Collections remain about $1.5 million below the amount collected during the same two months of the previous fiscal year.
Again, sales taxes account for the positive variance. Through August, net sales and use tax collections are nearly $61 million above forecast, while net individual income taxes are about $28 million below forecast, corporate income taxes $15 million below, and miscellaneous taxes roughly $11 million below projections.
The Department of Revenue notes that the comparisons are based on the Nebraska Economic Forecasting Advisory Board’s February 27 forecast, adjusted for legislation enacted this year and converted into monthly estimates in July.
Budget pressure remains
The August improvement follows five months of below-forecast monthly receipts. The Lincoln Journal Star reports the state’s current projected budget deficit has been reduced to just under $201 million. The longer-range outlook remains substantially larger, with current estimates showing an $846.7 million shortfall for the 2027-28 and 2028-29 biennium.
Governor Jim Pillen highlighted the stronger August report Tuesday, saying state revenue is “on track,” while maintaining that additional spending reductions will be necessary to balance the budget. His office noted that sales tax receipts are more than $60 million above forecast through the first two months of the fiscal year.
Pillen previously directed state agencies, boards and commissions to reduce spending by at least 5% and imposed a hiring freeze on most state positions as the administration works to address the budget gap.
The next monthly General Fund report will provide a better indication of whether August represents the beginning of a sustained improvement or primarily reflects continued strength in sales tax collections.