Revenue forecast sets stage for big choices

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February 24th, 2012

Lincoln, NE – The final forecast for state tax revenues before the Legislature makes some big budget decisions was finalized Friday. And while the numbers remain unchanged, that sets the stage for some important choices in the coming weeks.

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Members of the state’s economic forecasting advisory board were generally optimistic about the economy. But they tempered that optimism with concern about potential developments. North Platte banker Rick Kolkman pointed to agriculture.

Sen. Nordquist projects a $100 million shortfall in next year's budget. (Photo courtesy Nebraska Legislature)

“One concern we have is the rapidly escalating price of land,” Kolkman said. “And we’re thinking that there’s going to be a correction sometime down the road when commodity prices dip a little bit, that we could see some – little disruption there.”

Laurence Lanphier, chairman of the board and an accountant in Omaha, said that city’s economy seemed to be plugging along. But he had some global concerns.

“The Euro zone, Korea, Iran, Pakistan – those are all factors that we don’t really know if and when or how they’re going to impact the economy,” Lanphier said. “And then of course the oil prices and the value of the dollar, as it goes up and our exports decrease, there could be some serious problems there.”

With the board’s forecast for state revenues holding steady, that leaves it to legislators to reconcile competing demands on the state budget. Gov. Dave Heineman called the unchanged forecast “positive news,” and repeated his call for tax cuts to be the top legislative priority. But Omaha Sen. Jeremy Nordquist, a member of the Appropriations Committee, said even with scaled-back projections for state school aid increases, there’s around a $100 million shortfall in the next budget. Lawmakers will resume the task of balancing these and other competing demands next week.

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