LINCOLN — Nebraska started its new fiscal year about $19 million in the hole.
But Gov. Dave Heineman is sticking with a watch-and-wait approach to a special legislative session.
He said Tuesday that he wants to wait for August and September tax revenues before deciding about calling lawmakers back.
State Sen. Lavon Heidemann of Elk Creek, the Appropriations Committee chairman, agreed. “My opinion, I don’t think this is what’s going to push us over the cliff,” he said.
Still, the new revenue report adds to the state’s uneasy financial picture.
Nebraska ended the last fiscal year June 30 with net tax revenues falling more than $76 million below forecast. The July tax figures pushed the shortfall to more than $95 million, or about 2.7 percent of expected revenues for the current fiscal year.
Sen. Heath Mello of Omaha, a member of the Appropriations Committee, said that waiting until the legislature convenes in regular session in January will make the budget problem harder to tackle.
“The sooner we take responsibility, the better we can deal with the situation and protect taxpayers,” he said.
The report compares tax receipts to the official state revenue forecast developed at the end of February and used in setting the state budget for the current fiscal year.
Nebraska could get some help plugging the budget holes from a bill passed by Congress on Tuesday. If the state chooses to apply for the aid, it would provide the state with an estimated $69 million for Medicaid and $59 million for school aid.
Tuesday’s report showed both sales taxes and individual income taxes came in below expectations for the month. Net sales taxes came in $2.4 million less than had been forecast, while net income taxes were $2.1 million less.
But those would have been balanced out by higher-than-expected corporate income and miscellaneous taxes if not for an unexpected refund of nearly $19 million paid out under the state’s business tax incentive program.
According to the Nebraska Department of Revenue release, the forecast for the month had not anticipated that refund as a single payment.
Tax Commissioner Doug Ewald said the company can chose how to receive the refund, whether in one lump sum or spread out. He declined to name the company receiving the refund. State law allows such disclosure only in a biennial report.
Ewald said the refund was larger than most because of the size of the company involved and because it took longer for the company to qualify for the refund under the Nebraska Advantage program, which provides tax benefits to companies that build or expand in the state. Companies qualify by hiring a certain number of employees and making certain amounts of capital expenditures.
Despite coming at a time when the state is struggling, the refund did not shake the governor’s commitment to the Nebraska Advantage program.
He said Nebraska has one of the best business incentive programs and needs to continue it to attract businesses and jobs.
Heidemann didn’t waiver in his support for the incentives either.
“This is just part of business,” he said.
Copyright ©2012 Omaha World-Herald®. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald.
