Nebraska senators: More revenue could mean property tax cuts

LINCOLN, Neb. (AP) — Nebraska lawmakers who want to lower property taxes and replenish the state's rainy-day fund could have a slightly easier time accomplishing those goals next year, but many are still worried about the impact of major flooding and the struggling farm economy.

Key lawmakers said they're hopeful a recent uptick in state tax collections could help them reduce the burden on farmers and homeowners who have complained for years about rising property tax bills.

"It gives us some wiggle room so that maybe we don't have to scrounge around so hard for money," said Sen. Lou Ann Linehan, chairwoman of the Legislature's Revenue Committee. "We may able to deliver substantial property tax relief."

Lawmakers will get a better idea about the state's financial situation Thursday when the Nebraska Economic Forecasting Advisory Board meets to update its revenue estimates. Lawmakers and Gov. Pete Ricketts rely on the board's projections to determine how much money they'll have available in the coming year.

The Nebraska Department of Revenue reported last week that the state has collected more money than expected since July 1, the beginning of the new fiscal year.

Tax revenues were 6.3% higher than projections as of Sept. 30, bringing the state an additional $77 million, the department said.

More than half of that surplus came from corporate income taxes, which can vary widely from month to month. Ricketts said the trend "is setting the state up to do significant property tax relief in the upcoming legislative session."

Legislative leaders also said they'd like to continue rebuilding the state's cash reserve fund, which they've repeatedly used to balance the state budget in recent years when revenues came in lower than expected.

"I'm cautiously optimistic," said Sen. John Stinner, chairman of the Legislature's budget-writing Appropriations Committee.

Stinner said the extra money may help lawmakers pass a property tax package next year, but he urged senators to temper their expectations. Lawmakers may also face pressure to boost funding for job-training programs or the short-staffed corrections department, Stinner said.

"This gives us some room to maneuver, but as far as having all kinds of money to spend, that's not going to be the case," said Stinner, of Gering.

Stinner said state revenue could also dip again before the fiscal year ends. He noted that this year's widespread flooding and President Donald Trump's trade war with China have hurt agriculture, Nebraska's largest industry.

Speaker of the Legislature Jim Scheer said he and many other lawmakers consider property taxes a top priority, and he'd like to pass something early in next year's session. He said he'd also like to see funding to promote economic development in rural Nebraska, an area that has struggled even as Omaha and Lincoln are doing well.

But Scheer, of Norfolk, said an increase in revenue will probably mean more budget requests from outside groups, such as health care providers or construction contractors, which rely on state funding but haven't received as much because of tight budgets.

"We're probably going to see a lot of pent-up demand for a lot of different causes," he said.

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