LINCOLN — State tax collections in December fell below projections for the third month in a row.
A report issued by the Nebraska Department of Revenue Tuesdayshowed that net tax receipts were 8.8 percent, or $37.4 million, lower than expectations for the month.
“December was not pretty,” said State Tax Commissioner Tony Fulton. “But the totality of it was that we’re even.”
Receipts for the first half of the fiscal year were only 0.1 percent — or $3.2 million — lower than projections. Strong tax collections in July and September offset the weaker numbers seen during the remaining months of the year that began July 1.
More importantly, Fulton said, state tax collections grew 3.4 percent for the first half of the current fiscal year compared to the same period a year earlier.
Overall, the report showed that Nebraska has brought in $2.237 billion in net sales, income and miscellaneous taxes since July 1. That compares to projections that tax revenues would be $2.241 billion by that point.
Both individual and corporate income tax receipts were above projections, while sales taxes were below.
Higher-than-anticipated tax refunds dragged down the net sales tax figure. While gross sales tax collections for the six months were almost exactly as projected, tax refunds were $22 million higher.
Fulton said it is difficult to predict when taxpayers will claim refunds. The tax refund figure includes refunds claimed under the state’s business tax incentive programs.
The revenue trend could create problems for policymakers as they work on a new state budget.
Gov. Pete Ricketts and the Nebraska Legislature are building the budget using projections issued by the Nebraska Economic Forecasting Advisory Board in October. At that meeting, the board increased its previous revenue forecast for the year by $69 million.
But, as required by state law, the Revenue Department report compares actual tax collections to the lower revenue projections set in July.
“We will continue to closely monitor receipts,” Ricketts said, noting that the board will meet again in late February and late April to update the forecast.
