Lawmakers looking at $62.6 million projected shortfall
Nebraska lawmakers will be looking at a projected revenue shortfall of $62.6 million when they convene in January and start working on a new, two year state budget.
The Nebraska Economic Forecasting Advisory Board set that figure last Friday, which increased the state’s cash reserve – or rainy day fund — to about $770 million, which is right at the minimum recommended level of 16.7 percent of the General Fund for the next two-year budget period.
“It was a strong cash reserve that helped Nebraska weather the Great Recession better than most other states,” said OpenSky Policy Institute Executive Director Renee Fry. “It’s important to note that we still face a revenue shortfall of some $62.6 million for the upcoming two-year budget cycle under the current projection, not including the big-ticket item looming in the next budget for massive prison reform,”
Fry also emphasized that The Pew Charitable Trusts recently said that state tax collections appear to have become more volatile over the past 10 years. Pew also warned about misinterpreting positive revenue “upticks” as indicating a trend.
“As such, it’s important to realize today’s forecast is only part of the bigger budget picture and we need to take all economic factors into account when making fiscal policy,” Fry said. “Doing otherwise could have negative ramifications for our schools, communities and economy.”
Fry was quoted in several articles about the forecast: the Lincoln Journal Star, the Grand Island Independent and The Washington Times.