(The Center Square) – Tax revenues in Nebraska are going up, not down, despite the COVID-19 pandemic.
At one point, Nebraska was projecting a 10% revenue shortfall, Sarah Curry, Platte Institute Policy director, told The Center Square.
“Now, compared to last year at this time, we have a $500 million surplus,” she said. “It’s definitely not what we were expecting. Nebraska is actually quite well from a revenue standpoint.”
Other states are experiencing similar trends, Curry said.
Last March, the Nebraska Legislature passed an emergency bill to pay for costs associated with the pandemic, Curry said.
“Then when the federal CARES act was passed, we were able to reimburse ourselves for those expenses,” she said. “That really helped our budget a lot.”
Federal cash stimulus payments and other programs also have helped, she said.
“They meant that the state didn’t have to make direct payments to save businesses, Paycheck Protection Program loans did that,” she said. “The state hasn’t had to do as much because individual citizens also got their checks.”
The federal government also paid the cost of federal COVID-19 testing and vaccines.
“States didn’t have to spend a lot of revenue to address the pandemic like they would have in a natural disaster like a hurricane,” Curry said.
It helped that Nebraska was in solid financial shape before the pandemic, said Curry.
“Nebraska at the state level is very, very fiscally solvent,” Curry said. “We typically don’t have to borrow from the federal government for the unemployment trust fund. We keep enough in it. We keep enough in our ‘rainy day’ cash reserve fund so that if there is downfall, we can pull from that.”
As a result of the surplus this year, the Legislature’s Appropriations Committee has committed to putting an additional $100 million in the fund, which will bring it up to about 14.2% of annual state revenue, Curry said.
“That a nice chunk of cash just sitting there in case we have a down economy,” Curry said.