The Revenue Estimating Conference (REC) met Thursday to revise budget projections for the state’s 2022 and 2023 fiscal years. You can view the one pager HERE. As expected, the REC’s FY 2022 was revised upward by $110.5 million over the December estimate. This estimate reflects an overall increase in FY 2022 revenues of $370.5 million, or 4.2%, over FY 2021.
This March REC estimate accounts for the tax relief bill recently enacted by the Governor and Legislature. The REC predicts that FY 2023 revenues, will fall by 0.2 percent or roughly $14.8 million over FY 2022.
Work is continuing on additional tax reform policy. Earlier in the session, the Senate was forced to throw many provisions of their initial tax bill overboard as part of a compromise between with Legislature and the Governor to get a faster agreement on personal and corporate income tax relief. Senator Dawson (Council Bluffs), the Senate's Ways & Means Chairman, has introduced two separate bills in the last week that resurrect some of the provisions the Senate was forced to abandon.
First, SF 2372, contains modifications to some sales tax exemptions, exempts from income taxes the first $20,000 received in National Guard pay, reduces the bank franchise fee from 5% to 3.9% over 5 years, reduces the insurance premium rate from 1% to 0.9% over two years, and contains other provisions. You can read a summary of SF 2372 HERE.
The other bill, SSB 3157, would replace the Local Option Sales and Services Tax (LOSST) by raising the state sales tax by one penny, thereby triggering the funding of 3/8 cent into the Natural Resources and Outdoor Recreation Trust Fund. This bill expands on attempts in SF 2206 to ensure that no community sees a decrease in their LOSST revenues as a result of this bill by setting a base year and redistributing increases in revenues to fill any gaps created.