- Associated Press - Wednesday, May 6, 2015

LINCOLN, Neb. (AP) - Nebraska lawmakers agreed Wednesday to set aside even more money for property tax relief amid predictions that state revenue will grow faster than expected.

The budget that advanced to a final vote would boost the funding by $8 million, for a total of $408 million over two years. The money will go into the state’s property tax credit fund, which reduces what taxpayers owe to local counties, school districts and natural resources districts.

The Nebraska Economic Forecasting Advisory Board predicted last month that the state would collect more money than expected, giving senators an additional $9.7 million.

The Legislature’s budget committee recommended that lawmakers put $8 million of the extra money into the property tax fund.

“The Appropriations Committee felt this was a responsible and sustainable increase in direct property tax relief,” said Sen. Heath Mello, the committee chairman.

The rest of the surplus revenue will help replace a public-broadcasting antenna that fell off a tower in Alliance, and provide money for rural economic development bills.

The state forecasting board projected last month that state revenue will grow 5 percent during the fiscal year that starts on July 1 and 4.3 percent in the following year. Prior to the board meeting, many lawmakers had speculated that state revenues would decline and force them to make cuts in the $8.7 billion budget to avoid a deficit.

“These were funds we didn’t know we were going to have, and quite truthfully, I think all of us are thankful that we ended up on the plus side of things,” said Sen. Beau McCoy, of Omaha. “I think the right place to put these funds is in the property tax credit relief fund.”

Gov. Pete Ricketts, a Republican, urged lawmakers last month to use the surplus revenue on tax cuts.

On Monday, lawmakers gave initial approval to a separate property tax bill aimed at farmers and business owners.

The measure would allow business owners to exempt the first $10,000 worth of tangible property used in their operations, for an average tax savings of $162. The bill would apply to farm equipment such as irrigation pivots and tractors, and business equipment such as rail cars, pipelines and factory machines.

Lawmakers also voted to withdraw about $28 million from the cash reserve fund to pay for renovations to the Capitol’s heating, ventilation and air conditioning system. The full project is expected to cost $106 million, including the expense of restoring windows, moving Capitol offices across the street and a more efficient geothermal heat pump system. The withdrawals would take place over eight years.

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