LINCOLN- Nebraska’s Tax Rate Review Committee met to hear the latest report on the financial status of the next state budget, which covers fiscal years 2023-24 and 2024-25. Gov.-elect Jim Pillen will use the information to draft his proposed budget, though it ultimately will fall to the Legislature to pass a budget package.

State Sen. John Stinner of Gering, who chairs the Appropriations Committee, said state law limits the cash reserve from going above 16% of projected revenues. The current $2.3 billion reserve would amount to about 35% of total revenues.

Legislative Fiscal Analyst Keisha Patent said Nebraska experienced an “extraordinary” two years of revenue growth. In October, the Nebraska Economic Forecasting Advisory Board increased overall revenue projections for the next two fiscal years by roughly $1.8 billion. This added more than $620 million to the reserve, bringing it to its current estimate.

The report also projected a 4.5% increase in the state’s general fund for fiscal year 2023-24, bringing it to $5.3 billion. The fund is expected to jump another 1.6% to $5.4 billion for 2024-25. The current general fund is set at about $5.1 billion.

Pillen campaigned on several promises sure to color his budget recommendation. He pledged a massive overhaul of education funding, changing the state’s funding formula to allocate school funding on a per-student basis, rather than by district. He also strongly supported tax reform, although he was less specific on how he planned to achieve it.

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