Nebraska state budget (2010-2011)

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The state of Nebraska passed a $6.9 billion biennial budget[1] that included general fund appropriations of $3,319,794,999 for FY2009-10 and $3,405,101,292 for 2010-11.[2]

The state faced an approximately $751 million budget gap between expected revenue and the projected cost of running Nebraska state government.[3] According to officials the budget shortfall resulted from a lower forecast of state tax revenue and an increase in state aid to schools.[4]

The state received approximately $122 million from the federal government under HR 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[5][6]

Going into the fiscal year Nebraska had a total state debt of $1,102,440,010 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[7]


2011 State spending & deficit in billions[8]
Total spending Health and human services Education Protection Other
$3.4 $1.2 $1.5 $0.15 $0.60
2011 Local spending & deficit in billions[9]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$14.9 $0.20 $0.80 $3.6 $0.30 $0.9 $0.80 $13

FY2010-11 Biennial Budget

See also: Archived Nebraska state budgets

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government online.[10]

A report to the Tax Rate Review Committee in July 2011 showed actual receipts for FY2010 were $62.7 million over what was forecast in April 2011 by the Nebraska Economic Forecast Advisory Board.[11]

In Dec. 2010, the National Conference of State Legislatures said that the state faced a midyear shortfall of $74 million, which represented 2.1% of the FY2011 state budget.[12]

In the first month of FY2011, Nebraska state tax revenues were 9.6% below projections in July 2010.[13] The state expected to receive as much as $59 million in federal funds for education, an amount that equated to about 1,000 teaching jobs in the state. The state expected an additional $69 million for Medicaid.[14]

For FY 2010 Nebraska's General Fund saw a 2.9% reduction and a 5.3% increase in FY 2011 with a two year average of 1.1% per year. The General Fund was $3.38 billion for FY 2010 and $3.56 billion for FY 2011. Total funds were $8.4 billion for FY 2010 and $8.6 billion for FY 2011 compared to $8.2 billion for FY 2009.[15]

A $211.3 million unobligated ending balance at the end of the FY10/FY11 Biennial Budget was achieved by a combination of:[16]

  • Deficit and base reductions in several entitlement programs such as Medicaid and Homestead Exemption
  • Use of $554 million of the American Recovery and Reinvestment Act of 2009 (ARRA) funds
  • Use of $254 million of Cash Reserve Funds.

In addition to the state’s cash reserve fund and federal stimulus dollars, lawmakers also tapped other cash funds and most state agencies and aid programs were cut by 7%, while some were the object of more targeted cuts.[17] Heading into the budget period which began July 1, 2011, an estimated balance of about $320 million was in the cash reserve fund.[17]

For the fiscal year beginning July 1, 2011, the revenue shortfall was 8% of state spending, or $679 million, which was twice the size of the one closed in a special budget-cutting session in November. The $679 million shortfall was calculated using five-year historical averages for tax revenue growth and under which revenue was projected to increase annually by 7.2%.[17]

Sales taxes brought in only about $1.7 billion to the state and cities, and at the time Nebraska had 27 pages of tax exemptions, which was quite long when compared to neighboring states. Thus, lawmakers looked at removing exemptions to bring in more revenue when the state budget was pinched.[3]

Budget background

See also: Nebraska state budget

Nebraska operates on a biennium, covering two fiscal years at a time. The fiscal biennium began on July 1, 2009 and ends on June 30, 2011. Each state agency submits their budget recommendations along with prior spending and revenue data by September. In odd-numbered years the Governor was required to submit a budget proposal by January 15 with the exception in the first year of office a Governor may submit a proposal on or before February 15[18] to the Legislature. Following a series of hearings and meetings the Nebraska Unicameral make necessary amendments prior to returning the budget document to the Governor. The Governor had 5 days to sign, not sign, veto or use a line-item veto before the bill goes into effect. According to the state Constitution 30 votes were required to override the veto.[19]

A budget enacted for a fiscal year can be amended or changed up to the last day of that fiscal year. Deficit appropriations were changes made to the originally enacted appropriations. There were several chances to amend a biennial budget once it had been enacted. For example, the FY09-10 and FY10-11 biennial budget was enacted in the 2009 Session. Both years can be changed during the 2010 Session, even though at that time, the state would be nine months into FY09-10. The second year of the biennial budget (FY2010-11) can also be subject to change prospectively during the 2010 Session and again during the 2011 Session as a “deficit” during the fiscal year.[20]

Budget figures

The following table provides a history of Nebraska's expenditures and gross domestic product (GDP).

Fiscal Year Expenditures (billions) GDP (billions)
2000 $10.8[21] $55.5[21]
2001 $11.6[21] $57.4[21]
2002 $12.5[21] $59.9[21]
2003 $13.3[21] $64.6[21]
2004 $14.1[21] $68.4[21]
2005 $14.3[21] $71.2[21]
2006 $15.3[21] $75.3[21]
2007 $16.3[21] $80.1[21]
2008 $17.4[21] $85.2[21]
2009 $18.6*[21] $90.6*[21]
  • NOTE: The figures for FY 2009 were not finalized

2008-2009 budget crisis

See: Nebraska state budget (2008-2009)

Accounting principles

See also: Nebraska government accounting principles

The Nebraska Auditor of Public Accounts office was responsible for independent, accurate, and timely audits, evaluations, or investigations of the financial operations of Nebraska State and local governments. Mike Foley had been Auditor of Public Accounts since his election in November of 2006. The office of the Auditor of Public Accounts was one of six offices making up the executive branch of Nebraska State Government. Nebraska's audit reports were published online.[22][23]

The Institute for Truth in Accounting (IFTA) rates Nebraska “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Nebraska's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[24] Nebraska's CAFRs were published online by the Nebraska Administrative Services Accounting Division.[25]

Paul Carlson was State Accounting Administrator. State Accounting was a division of the Department of Administrative Services (DAS) and operates and maintains statewide financial systems. The division pre-audits agency transactions, issues statewide Comprehensive Annual Financial Reports (CAFR) and Budgetary Reports, and coordinates the long-term financing needs of the state. State Accounting also prepares the Statewide Cost Allocation Plan (SWCAP).[26]

Credit Rating Fitch Moody's S&P
Nebraska[27] NR Aa3 AA+

Budget transparency

NebraskaSpending.com was the name of the publicly available website created by the Nebraska government. It disclosed information about how the state spends taxpayer dollars, and included data on agency expenditures and contracts. NebraskaSpending.com was created at the initiative of State Treasurer Shane Osborn in July, 2007.[28] Treasurer Osborn reports that to date, more than 600,000 users had visited nebraskaspending.com (in a state of 1.7 million people). The average site visitor spends 18 minutes on the site, according to Osborn.

Cost estimates for creating online transparency websites had varied widely from state to state. As Nebraska's Treasurer Osborn notes in his ]letter to Virginia's legislators, such estimates were sometimes erroneous and higher than they should be. According to Osborn, nebraskaspending.com only cost $38,000, despite an initial $1.1 million cost estimate.[29][30]


Treasurer Shane Osborn speaks about Nebraska's online spending site
NebraskaSpending.com also articulated Nebraska's openness to change and improvement to the site. The Treasurer writes:
If we were to be truly successful in bringing more transparency to state government, it would have to be a collective effort. I encourage you to contact me with your thoughts and ideas as to how we can improve this site and make Nebraska the most efficient state government in the country![31]

Government tools

NebraskaSpending.com provided a database of state financial information, which was searchable by criteria such as amounts spent, agency, and vendors. The following table was helpful in evaluating the level of transparency provided by NebraskaSpending.com:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
NebraskaSpending.com Y
600px-Yes check.png
Y
600px-Yes check.png
Y
600px-Yes check.png
N
600px-Red x.png
Y
600px-Yes check.png
N
600px-Red x.png
See also: Evaluation of Nebraska state website

Economic stimulus transparency

  • Nebraska would receive approximately $122 million from the federal government under HB1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[32][33]
  • The state received an estimated $871,442,210 from the American Recovery and Reinvestment Plan of 2009.[34]
  • Nebraska established an economic recovery website to show how legislators and government officials in Nebraska were spending Federal funds.[35]

Public employee salary information

See also: Nebraska state government salary

Although NebraskaSpending.com did not yet have the capacity for users to search for the salaries of specific employees, the Nebraska Library Commission provides statistics about state employee salaries.[36]

See also

External links

Additional reading

References

  1. The Lincoln Journal Star "Special session to cut Nebraska budget begins" Nov. 4, 2009
  2. State Budget Division "General Fund Appropriations Summary, 2009 ‐ 2011 Biennium"
  3. 3.0 3.1 "Lawmakers eye tax exemptions" August 8, 2010
  4. Omaha World-Herald,"Budget plan cuts most agencies," March 9, 2010
  5. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  6. H.R. 1586
  7. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  8. State Budget Division, General Fund Appropriations Summary
  9. USA Spending, State Guesstimated* Government Spending
  10. FY2011 CAFR
  11. Cite error: Invalid <ref> tag; no text was provided for refs named impasse
  12. The Wall Street Journal “States Face Budget Shortfalls of $26.7 Billion“ Dec. 8, 2010
  13. Businessweek "Nebraska tax revenue misses mark in July" Aug. 10, 2010
  14. The Omaha World-Herald "Stimulus funds may not require action" August 7, 2010
  15. Nebraska Legislative Fiscal Office, "State of Nebraska Biennial Budget (2009 Session)," August 2009
  16. Nebraska Legislative Fiscal Office, "State of Nebraska Biennial Budget (2009 Session)," August 2009
  17. 17.0 17.1 17.2 "Monster budget gap awaits" Omaha World-Herald April 19, 2010
  18. Nebraska Legislative Fiscal Office, "State of Nebraska Biennial Budget (2009 Session)," August 2009
  19. Nebraska Council of School Administrators,"Nebraska budget process," October 30,2008
  20. Nebraska Legislative Fiscal Office, "State of Nebraska Biennial Budget (2009 Session)," August 2009
  21. 21.00 21.01 21.02 21.03 21.04 21.05 21.06 21.07 21.08 21.09 21.10 21.11 21.12 21.13 21.14 21.15 21.16 21.17 21.18 21.19 US Government Spending,"Nebraska State and Local spending," accessed April 8,2009
  22. Nebraska Auditor of Public Accounts Web site, retrieved October 30, 2009
  23. audit reports
  24. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  25. Nebraska Administrative Services Accounting Division
  26. Nebraska Accounting Division Web site, retrieved October 30, 2009
  27. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  28. National Taxpayers Union, "Taxpayer Group Applauds South Carolina Governor, Nebraska Treasurer for Putting State Spending Online," October 10, 2007
  29. Shane Osborn, "Letter to Virginia Legislators," January 27, 2009
  30. Letter from Treasurer Osborn
  31. NebraskaSpending.com homepage
  32. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  33. Cite error: Invalid <ref> tag; no text was provided for refs named HB1586
  34. Wall Street Journal,"Stimulus Spending by State," March 12,2009
  35. Nebraska Economic Recovery
  36. Nebraska Library Commission Employee Salaries