- Associated Press - Friday, February 28, 2014

LINCOLN, Neb. (AP) - Nebraska could see an additional $99 million for its current budget, setting the stage for more debate over taxes and spending.

The board that predicts state revenue updated its estimates Friday for the budget period between now and June 30, 2015. Lawmakers and the governor rely on the figures when setting Nebraska’s two-year budget.

Sen. Health Mello, chairman of the Legislature’s Appropriations Committee, said lawmakers will need to seek balance in the state’s priorities. The new projections give lawmakers greater flexibility for priorities such as tax reform, water-project investments, public education and the state prisons, he said.

Gov. Dave Heineman called on lawmakers to use the revenue for tax relief.

“The Legislature now has a clear choice: Tax relief for Nebraskans or a spending spree for special interest groups,” Heineman said in a statement.

Members of the Nebraska Economic Forecasting Advisory Board said the state economy is holding strong in the years since the recession, with low unemployment and a housing shortage in rural areas.

“Things seem to be slowly improving,” board member Leslie Anderson said.

Board members predicted that the state will receive about $4.1 billion in the current fiscal year, which is $36 million higher than previous forecasts. By law, that money will go into Nebraska’s cash reserve that is used for emergencies and one-time expenses.

The board said the state will collect more than $4.2 billion in the next fiscal year, roughly $63 million more than initially expected. Most of that money will go to the state’s general fund for future use.

Revenue is expected to grow by 4.2 percent in the fiscal year that ends on June 30 and another 4.5 percent the following year. The growth is slightly below the state’s historic average of 5.1 percent.

The OpenSky Policy Institute, a Nebraska tax-policy think tank, urged lawmakers to view the projections cautiously. If the forecasts are high, the state could be forced to make cuts next year, said Renee Fry, the group’s executive director.