LINCOLN — Legislative budget-writers held fast Thursday on their decision to halve property tax credit increases, even after a state panel raised its revenue projections for the next budget period.

The Nebraska Economic Forecasting Advisory Board boosted its earlier predictions of state tax revenue by $55 million through June 30, 2021.

But the board predicted that $45 million of the total will come in during the current fiscal year, which ends June 30. By law, that amount will go directly into the state’s cash reserve fund, commonly called the rainy day fund.

Board members forecast only a $10 million increase in the next two fiscal years, saying blizzards, floods, farm woes and the state’s shortage of workers make the future too difficult to predict.

Gov. Pete Ricketts seized on the revised revenue projections to renew his call for adding $51 million a year to the Property Tax Credit Fund, which would bring the total to $275 million.

“Today’s forecast is good news for property tax relief,” he said. “The $55 million increase in the forecast allows the Appropriations Committee to deliver the full amount of property tax relief I recommended in my budget for farmers and homeowners.”

Earlier this week, the committee scaled back plans for adding to the tax credits. Members voted to add $26 million a year to the tax credit fund and put $25 million into the cash reserve fund during each year of the two-year budget period.

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The committee met again Thursday afternoon to finish final details of their budget plan. No one offered a motion to change the amount allocated for property tax credits.

State Sen. John Stinner of Gering hailed the new revenue forecast’s effect on the cash reserve fund.

With the $45 million from the new projections, plus the $50 million infusion approved by the committee, the fund is expected to be at about $372 million by June 30, 2021.

“It was helpful certainly to the rainy day fund,” he said. “Our goal is to get closer to $500 million” in that fund, equal to about 10% of the state’s annual general fund revenues.

Renee Fry, executive director of the OpenSky Policy Institute, a Lincoln-based think tank, said that bolstering the cash reserve would help the state stay on solid fiscal ground.

“The expected increase in revenue is likely a one-time occurrence linked to the federal tax changes in 2017 rather than a reflection of a strengthening economy,” she said.

State officials told the forecasting board that projecting tax revenues for the current fiscal year has been difficult because of the unknown effects of the federal tax changes. Revenues came in slower than expected through the first nine months of the year, but have been higher than expected so far this month.

The forecasting board predicted revenues of $4.765 billion for the current fiscal year, followed by $4.88 billion and $4.99 billion in the next two years.

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Martha Stoddard keeps legislators honest from The World-Herald's Lincoln bureau, where she covers news from the State Capitol. Follow her on Twitter @StoddardOWH. Phone: 402-473-9583.

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