Final revenue report before new economic forecast shows $47 million loss
By:Erin Bamer
Nebraska Examiner
LINCOLN — After two months of higher-than-expected tax revenues, Nebraska’s monthly general fund receipts fell just before economic forecasters will update the state’s projected budget deficit.
Nebraska’s September tax receipts show a net loss of 6.6% under what Nebraska’s Economic Forecasting Advisory Board predicted in April, according to the state Department of Revenue. That equates to roughly $47 million in less revenue in the state’s coffers.
That followed tax receipts from July and August, which came in modestly above projections and brought in an additional $32 million. Appropriations Chair State Sen. Rob Clements of Elmwood said while September’s drop is “disappointing,” he wasn’t too concerned, because overall net receipts for the current fiscal year remained relatively flat.
Net tax receipts so far for fiscal year 2025-26 are about 0.9% below forecasts — a difference of about $15 million, the Revenue Department noted.
The biggest contributor to the drop was corporate income tax receipts, which came in 31% below projections, a loss of $56 million. Clements said he suspects that this is ImagiNE Act tax credits accelerating in September, based on information he received from a department analyst.
The ImagiNE Act is an economic incentive program for businesses expanding in or relocating to Nebraska. Clements said the program was expected to dole out about $36 million in credits over 12 months, but it’s distributed roughly $22 million over the last three months alone. The incentives, within limits under state law, allow businesses to pick which tax year to take the tax credits, which can make predicting the timing more difficult.
Legislative Fiscal Analyst Keisha Patent said other factors may be at play as well, including a drop in quarterly estimated corporate tax payments. State officials previously hoped these payments would raise September’s receipts above projections, but Patent said if corporate profits have fallen this fiscal year, that would lower their payments.
The outlier in the Revenue report was miscellaneous taxes, which came in 365% above projections, but that slice is the smallest portion of Nebraska’s overall tax revenues. That resulted in an additional net $18 million for the month, a small portion of the $661 million the state generated in September.
Miscellaneous taxes are a bit of a mixed bag, but they can include things like Nebraska’s alcohol and cigarette taxes.
Patent said this was not due to any changes in miscellaneous taxes, but was more due to past projections. She said the state bases its miscellaneous tax projections based on monthly receipts from the previous year, which is why July’s miscellaneous receipts were about 41% below forecast, and September’s essentially offset that, Patent said.
“It’s really just a timing thing,” she said. “It doesn’t have to do with the receipts themselves.”
September’s receipts are significant because it’s one of the last pieces of information the forecasting board will receive before its next meeting Oct. 31. However, both Clements and Patent said the board also will receive some early estimates for October revenues because it is meeting at the end of the month.
The board’s new projections will update the state’s expected budget deficit, which currently stands around $95 million. Members will consider monthly general fund receipts, as well as other economic factors.
Another factor the board could consider is the impact of the “One Big Beautiful Bill.” A separate Revenue report from September estimated that the new tax and spending law could cost Nebraska’s state government about $216 million over the next two years of its current budget cycle. Pillen and other conservative state leaders supported the bill.