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Revision as of 13:43, 28 August 2014


Nebraska state budget

Flag of Nebraska.png
Budget calendar:  Annual
Current fiscal year:  2014
State credit rating:  AAA (as of May 2012)
Current governor:  Dave Heineman
Financial figures
GF expenses[1]:  $3.6 billion
All funds expenses:  $10.2 billion (FY 2013 estimate)
Spending % change:  Green Arrow Up Darker.svg5.6%[2]
% from federal funding:  34.34%
State debt:  $13,139,045,000
Per capita state debt:  $7,081
Other state budgets
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Policypedia Budget Policy-logo-no background.png
This page contains information about budget processes and policy issues in Nebraska, including:
  • A summary of the budget drafting process
  • Trends in expenditures and revenues
  • Current and past fiscal year budget developments
  • Financial transparency measures

Between fiscal year 2009 and fiscal year 2013, Nebraska's total expenditures increased by approximately $600 million, from $9.6 billion in 2009 to $10.2 billion in 2013. This represents a 5.9 percent increase, below the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instruction guidelines are sent to state agencies in July.
  2. Agency requests are submitted to the governor in September.
  3. Agency hearings and public hearings are held in January and February.
  4. On or before January 15, the governor submits his or her proposed budget to the Nebraska State Senate.
  5. The Senate adopts a budget in May. A simple majority is required to pass a budget.

Nebraska is one of 44 states in which the governor has line item veto authority.[6]

The governor is constitutionally required to submit a balanced budget. In turn, the legislature is statutorily required to adopt a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures**
Nebraska $3,590 $3,014 $3,559 $0 $10,163 $5,439.08
Iowa $6,231 $5,682 $7,539 $157 $19,609 $6,345.10
Kansas $6,198 $3,599 $4,193 $415 $14,405 $4,977.61
Missouri $8,022 $7,209 $7,712 $0 $22,943 $3,795.89
South Dakota $1,302 $1,487 $1,307 $35 $4,131 $$4,670.31
**Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Nebraska can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
Nebraska 15.3% 23.5% 0.5% 16.7% 2.3% 7.5% 34.3%
Iowa 16.8% 25.0% 0.6% 19.6% 2.7% 7.5% 27.8%
Kansas 25.8% 16.9% 0.3% 18.6% 2.5% 8.8% 27.1%
Missouri 22.6% 4.7% 0.7% 35.0% 2.6% 10.4% 23.9%
South Dakota 14.3% 17.7% 0.8% 20.9% 2.7% 15.9% 27.7%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

From 2008 to 2012, expenditures on elementary and secondary education increased by 0.5 percentage points, a 3.4 percent increase in the share of the budget, and expenditures on higher education increased by 1.5 percentage points, a 6.8 percent increase in the share of the budget. During the same time period expenditures on public assistance, Medicaid, corrections and transportation decreased by one percentage point or less. For public assistance, that represented a decrease of 28.6 percent in the share of the budget. For Medicaid, it represented a decrease of 5.6 percent in the share of the budget. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
2012 15.3% 23.5% 0.5% 16.7% 2.3% 7.5% 34.3%
2011 16.3% 22.8% 0.6% 16.4% 2.3% 6.6% 34.9%
2010 15.7% 22.4% 0.6% 17.2% 2.3% 7.4% 34.4%
2009 15.1% 22.7% 0.6% 17.6% 2.4% 8.2% 33.4%
2008 14.8% 22.0% 0.7% 17.7% 2.5% 7.8% 34.4%
Change in % 0.50% 1.50% -0.20% -1.00% -0.20% -0.30% -0.10%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Nebraska $1,475 $2,102 $276 $1 $199 $4,052 $2,168.57
Iowa $2,109 $3,315 $448 $120 $645 $6,637 $2,147.61
Kansas $2,525 $2,931 $371 $0 $514 $6,341 $2,191.12
Missouri $1,872 $5,489 $415 $0 $307 $8,083 $1,337.32
South Dakota $776 $0 $0 $1 $587 $1,364 $1,614.44
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Nebraska ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $1,475 $2,102 $276 $1 $199 $4,052 $2,168.57
2012 $1,437 $1,823 $234 $1 $201 $3,696 $1,992.08
2011 $1,373 $1,735 $155 $1 $236 $3,500 $1,900.37
2010 $1,290 $1,515 $154 $1 $245 $3,205 $1,751.52
2009 $1,326 $1,600 $198 $1 $232 $3,357 $1,868.51
Change in % 11.24% 31.38% 39.39% N/A -14.22% 20.70% 16.06%
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

DocumentIcon.jpg See budget bill: 2013-2015 Biennial Budget

Fiscal year 2014

Nebraska state budget -- 2014
Nebraska State Legislature
Text:LB 906 (This is one of three bills that comprise the 2013-2015 budget)
Legislative history
Introduced:January 15, 2014
Senate:March 24, 2014
Vote (upper house):41-7-1
Governor:Dave Heineman
Signed:March 29, 2014
Vetoed:Line-item reductions

The enacted Biennial budget for 2013-2015 comprised of three different bills passed by the Nebraska State Senate. Governor Dave Heineman signed all three bills on March 29, 2014 with line-item reductions.[14] Some of the line-item reductions included vetoing portions of transfers from the General Fund to the Water Sustainability Fund and the Game and Parks State Park Improvement and Maintenance Fund.[15]

Fiscal year 2013

See also: Nebraska state budget (2012-2013)

Fiscal year 2012

See also: Nebraska state budget (2011-2012)

Fiscal year 2011

See also: Nebraska state budget (2010-2011)

Fiscal year 2010

See also: Nebraska state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in Nebraska ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $3,446 34.9% $3,443 34.9% $2,988 30.3% $0 0% $9,877
2010-2011 $3,324 33.9% $3,261 33.3% $3,222 32.9% $0 0% $9,807
2009-2010 $3,313 34.5% $3,320 34.6% $2,973 30.9% $0 0% $9,606
Averages: $3,361 34% $3,341.33 34% $3,061 31% $0 0% $9,763.33
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Nebraska had a state debt of over $13 billion. Its state debt per capita was $7,081. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[16][17]

Total state debt in Nebraska[18]
Type Totals U.S. rank
Total state debt $13,139,045,000 46
Per capita debt $7,081 49
State and other fund expenditures $6,889,000,000 48

Public pensions

See also: Nebraska public pensions and Nebraska public employee salaries

Nebraska had 37,060 total public employees as of 2011.[19] In Fiscal Year 2012, the state had a total of 82,898 active pension fund members, with 20,697 receiving periodic benefit payments.[20]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[21]

The table below lists the Standard and Poor's credit rating for Nebraska from 2001 to 2012 (grades from surrounding states are provided for additional context).[21]

S&P credit ratings from 2001 to 2012
Nebraska Iowa Kansas Missouri South Dakota
2012 AAA AAA AA+ AAA AA+
2011 AAA AAA AA+ AAA AA+
2010 AA+ AAA AA+ AAA AA
2009 AA+ AAA AA+ AAA AA
2008 AA+ AAA AA+ AAA AA
2007 AA+ AA+ AA+ AAA AA
2006 AA+ AA+ AA+ AAA AA
2005 AA+ AA+ AA+ AAA N/A
2004 AA+ AA+ AA+ AAA N/A
2003 AA+ AA+ AA+ AAA N/A
2002 AA+ AA+ AA+ AAA N/A
2001 AA+ AA+ AA+ AAA N/A

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[22]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[22]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
Nebraska 34.34% $3,141,413,000 22
Iowa 33.27% $6,073,376,000 25
Kansas 26.95% $4,061,217,000 41
Missouri 39.42% $10,440,927,000 5
South Dakota 40.85% $1,630,220,000 4

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, Nebraska received $1.27 billion in federal stimulus funding from the American Recovery and Reinvestment Act between February 2009 and June 2013.[23]

Budget transparency

Transparency evaluation
Nebraska Spending
Searchability Y
600px-Yes check.png
Grants Y
600px-Yes check.png
Contracts Y
600px-Yes check.png
Line item expenditures Y
600px-Yes check.png
Dept./agency budgets Y
600px-Yes check.png
Public employee salaries N
600px-Red x.png
Last evaluated in 2009.
See also: Evaluation of Nebraska state website and Constitutional provisions regarding reading of bills

NebraskaSpending.com is a publicly available website created by the Nebraska government. It discloses information about how the state spends taxpayer dollars and includes data on agency expenditures and contracts. It was created at the initiative of State Treasurer Shane Osborn in July, 2007.[24]

Cost estimates for creating online transparency websites had varied widely from state to state. As Nebraska's Treasurer Osborn noted in his letter to Virginia's legislators, such estimates were sometimes erroneous and higher than they should have been. According to Osborn, Nebraskaspending.com only cost $38,000, despite an initial $1.1 million cost estimate.[25]


Treasurer Shane Osborn speaks about Nebraska's online spending site.

Government tools

The Nebraska Spending website provides a database of state financial information that is searchable by criteria such as amounts spent, agency and vendors. The table to the right is helpful in evaluating the level of transparency provided by Nebraska Spending.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Nebraska, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[26][27]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Nebraska tied for 33rd in the nation with 12 other states, earning four out of eight possible points.[27]

Nebraska - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures N
600px-Red x.png
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting
{{{1}}}
Annual cycle N
600px-Red x.png
Binding revenue forecast
{{{1}}}
Legislative revenue forecast
{{{1}}}
Nonpartisan staff
{{{1}}}
Constitution or statutory tax/spend limitations N
600px-Red x.png
TOTAL 4

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[27]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[28] According to the report, Nebraska received a grade of B- and a numerical score of 82, indicating that Nebraska was an "advancing" state in terms of transparency regarding state spending.[28]

Accounting principles

See also: Nebraska government accounting principles

The Nebraska Auditor of Public Accounts office is responsible for independent, accurate and timely audits, evaluations and investigations of the financial operations of Nebraska state and local governments. The office of the Auditor of Public Accounts is one of six offices that make up the executive branch of the Nebraska State Government. Nebraska's audit reports are published online here.[29]

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 six 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.[30] Nebraska's CAFRs were published online by the Nebraska Administrative Services Accounting Division.[31]

State Accounting is a division of the Department of Administrative Services (DAS) that 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).[32]

Credit Ratings

Credit Rating Fitch Moody's S&P
Nebraska[33] NR Aa3 AAA[34]

S&P raised Nebraska's credit rating from AA+ to AAA, in part because the state had sought structural balance rather than relying on nonrecurring actions to balance its budgets.[35]

Contact information

DAS Budget Division
Room 1320, State Capitol
P.O. Box 94664
Lincoln, NE 68509-4664
PHONE: (402) 471-2526
FAX: (402) 471-8074

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. Official Nebraska Government Website, "State Budget Division," accessed April 23, 2014
  15. Official Nebraska Government Website, "Memo to the Nebraska Legislature from the Governor," March 29, 2014
  16. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  17. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  18. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  19. 2011 Annual Survey of Public Employment and Payroll, Census 2010
  20. 2010 Annual Survey of Public Employment and Payroll--Membership by State, Census 2010
  21. 21.0 21.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  22. 22.0 22.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  23. Recovery, "Stimulus Spending by State"
  24. National Taxpayers Union, "Taxpayer Group Applauds South Carolina Governor, Nebraska Treasurer for Putting State Spending Online," October 10, 2007
  25. Shane Osborn, "Letter to Virginia Legislators," January 27, 2009
  26. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  27. 27.0 27.1 27.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  28. 28.0 28.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  29. Nebraska Auditor of Public Accounts Website, accessed October 30, 2009
  30. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  31. Nebraska Administrative Services Accounting Division
  32. Nebraska Accounting Division Web site, accessed October 30, 2009
  33. State of Indiana, “State Credit Ratings," June 24, 2009
  34. Pew Stateline Infographic on State Credit Ratings, accessed September 26, 2013
  35. The Lincoln Journal Star, "S&P raises state of Nebraska's rating to AAA," May 6, 2011