Nebraska finishes year above revenue forecast, but growth still sluggish
The state of Nebraska’s Net General Fund receipts for fiscal year 2013-2014 were $4.117 billion — which is 2.4% above the certified forecast of $4.021 billion. That means an extra $97 million for the cash reserve — also known as the “rainy day fund.”
— Revenues came in 2.4 percent higher than the original forecast, but that forecast was conservative, projecting revenues to shrink 0.8 percent.
— Revenue growth for the year is only 1.6 percent, which is better than was forecast but much worse than the long-term average of 5.7 percent.
— The Rainy Day Fund will now be projected to hold $707.5 million this year, which will be 16.7 percent of annual revenues, putting us right at the minimum recommended level by the Government Finance Officers Association. It was good that the Legislature protected this balance so Nebraska could get back up to at least that minimum amount.
— Nebraska economic growth (measured by Personal Income) has remained below historic averages for nine consecutive quarters (aka more than two years), registering near-zero growth in the fourth quarter of 2013 and first quarter of 2014. That’s the worst 6-month period since FY 09-10. We don’t yet have Personal Income data for the second quarter of 2014.