Nebraska state budget and finances

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Nebraska state budget

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Budget calendar:  Biennial
Fiscal year:  2012-13
Date signed:  April 2, 2012
Other state budgets
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The Nebraska state legislature passed the bills making up the $7.1 billion FY2013 state budget on March 27, 2012,[1] and Gov. Dave Heineman signed it into law on April 2, 2012, with no vetoes.[2] The enacted budget can be found online.[3]

Nebraska operates on a biennial budget cycle, with the fiscal year beginning on July 1 of each year.[4] An explanation of the state budget process provided by the Nebraska legislature can be found online.[5] A report by OpenSky Policy Institute in 2012 found that in 14 of the past 16 years, the state budget had had a structural deficit.[6]

In FY 2012, Nebraska had a total state debt of approximately $7,829,117,000 when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the budget gap.[7] The FY2013 state debt total was similar to the FY2012 state debt total of $7,805,175,000.[8] Nebraska's total state debt per capita was $4,248.86.[9]

According to a 2012 study by 24/7 Wall Street, Nebraska was the third best run state taking into account debt per capita, budget deficits, unemployment, median household income, and the percentage of the percentage of the population below the poverty line. The best run state was North Dakota and the worst run state was California. [10]

Federal Aid to State Budget

The chart below represents how much of the state’s budget comes from the federal government. The number was the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):

State 2008 2009 2010 2011
Nebraska 30.64% (#23) 32.96% (#26) 36.48% (#25) 36.23% (#26)
  • Figures were calculated by dividing each state’s intergovernmental revenue into its general revenue.[11][12]

FY2014-15 Biennial Budget

The legislature anticipateed a structural imbalance of under $200 million.[13]

In Jan. 2013, the Legislative Fiscal Office predicted net revenues of $3.80 billion and expenses of $3.87 billion in 2013-14 and in 2014-15, net revenues of $3.96 billion and expenses of $4.05 billion.[13] The state forecasting board projected average revenue growth of 4.7 percent in the current budget period and 4.5 percent in the coming one. The historical average was 5 percent.[13]

FY2012-13 Biennial Budget

See also: state budgets

The FY2012-13 state budget was passed by the legislature during the 2011 session and can be found as enacted online. The legislature then adusted the budget during the 2012 session and the amendments can be found online as well.[14][15]

The state's $7.1 billion budget for FY2013 was contained in multiple bills before the legislature. The deficit spending bill was LB968 and the bill addressing fund transfer was LB969. The legislature approved the bills making up the $7.1 billion budget on March 27, 2012.[1] Gov. Dave Heineman signed the budget bills into law on April 2, 2012, with no vetoes.[16]Cite error: Invalid <ref> tag; name cannot be a simple integer. Use a descriptive titleCite error: Invalid <ref> tag; name cannot be a simple integer. Use a descriptive title

Budget bills

LB968 was the main budget bill. The legislature approved it with a vote of 45-2.[1][17][18]

LB131, the cash reserve bill, includes $80 million in capital construction, primarily for higher education projects. The legislature voted 43-2 in favor of passage.[1][19][20]

LB969 was the bill that permitted fund transfers, which the legislature passed with a vote of 43-3.[1][21]Cite error: Invalid <ref> tag; name cannot be a simple integer. Use a descriptive title

The governor said he believed a highlight of the budget was $71 million included in the budget for a new University of Nebraska cancer research center.[16] It also increases state spending on child welfare and child care services and rolls back some cuts in Medicaid payments to health care providers.[16]

Tax relief

In Jan. 2012, Sen. Abbie Cornett introduced a tax relief plan contained in LB970 on behalf of the governor. The plan as originally proposed would cut $327 million in taxes by eliminating the inheritance tax and would lower individual and corporate income taxes.[22] The three-year plan would cost roughly $52 million for this budget period, eating up a large chunk of the $63 million that was available under the Appropriations Committee's tentative budget.[23]The governor said in his State of the State address that he planned to expand the brackets for middle-class residents.[24] In the legislature, however, the governor's tax cut proposal shrunk to one-third of its original size.[25][26]

FY2011-12 Budget

The state of Nebraska passed a biennial budget for FY 2011-2012 on May 11, 2011. The budget spends approximately $7 billion over the biennium and closes a budget gap that had been projected to be nearly $1 billion.[27]

In Feb. 2012, the Nebraska Economic Forecasting Advisory Board predicted that the state would have no additional tax money besides the nearly $52 million in additional revenue for FY2012, ending June 30, 2012, and roughly $62 million in FY2013 than it predicted in October 2012.[23]

The legislature passed a budget for FY 2011-2012 on May 11, 2011. The budget spends approximately $7 billion over the biennium and closes a budget gap that had been projected to be nearly $1 billion.[28] The budget did not raise taxes and it cuts state agency budgets. It also rewrites the school funding formula which would save $410 million over the biennium and leaves nearly $300 million in the state's cash reserves.[29] A General Fund Appropriations Summary prepared by the state for the 2011‐2013 Biennium can be found online.[30]

Gov. Dave Heineman said he opposed dipping into the state's $325 million cash reserve fund to cover the budget gap.[31] The governor supports a bill that would eliminate state aid to local governments, saving $44 million a year.[32]

Lawmakers had said they plan to close the budget gap without tax increases.[33] Options on the table include transferring $270 million from the state's cash reserve fund and holding total state spending growth to about 1.5 percent to 2 percent for the two years.[33] The November spending estimates showed growth increase of 7.6 percent, down from the 10.4 percent growth of prior estimates.[33] The growth in spending decreased due to lower school aid calculations and a new contract with the largest state employees union that calls for a pay freeze next year and 2 percent raises in 2012-13.[33]

Federal funds accounted for approximately one-third of the state budget. This year, the state expects about $2.6 billion.[34]

Collective Bargaining and Public Employee Unions

Sen. John Nelson introduced LB664, which would abolish the Commission on Industrial Relations and prohibit the state from engaging in collective bargaining, and would save the state about $500,000 over two years.[35]

Budget Cuts

Nebraska lawmakers had been told that the fat had been cut and the next step was for legislative committees to identifying possible cuts totaling 10% of state general-fund appropriations for all agencies under their purview.[36] Nebraska Education Commissioner Roger Breed told the Legislature's Education Committee that there was no more fat to cut and that cutting 10% would mean eliminating programs.[36] The Health and Human Services Committee must identify possible cuts of $235 million that could be made over the next two-year budget cycle.[37] The Department of Health and Human Services oversees welfare and Medicaid, accounting for 35% of the state's general-fund budget, where as it used less than 31% of the state budget a decade ago.[37]

Budget transparency was the name of the 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. was created at the initiative of State Treasurer Shane Osborn in July, 2007.[38] Treasurer Osborn reports that to date, more than 600,000 users had visited (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.[39] According to Osborn, only cost $38,000, despite an initial $1.1 million cost estimate.[40]

Treasurer Shane Osborn speaks about Nebraska's online spending site

Government tools provides 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 Nebraska Spending:[41]

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
Nebraska Spending Y
600px-Yes check.png
600px-Yes check.png
600px-Yes check.png
600px-Yes check.png
600px-Yes check.png
600px-Red x.png
  • The expenditures page contains both line item expenditures and grants.[42]
  • All open contracts with the state were posted.[43]

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 measures state transparency as of September 2011 using indicators from a range of organizations. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents 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.[44][45]

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[46][47]

Budget background

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[48] 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. [49] ball 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.[50]

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. 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.[51][52]

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.[53] Nebraska's CAFRs were published online by the Nebraska Administrative Services Accounting Division.[54] [55]

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).[56]

Credit Ratings

Credit Rating Fitch Moody's S&P
Nebraska[57] NR Aa3 AAA[58]

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.[59]


Nebraska received $1.27 billion in federal stimulus funding from the American Recovery and Reinvestment Act between February 2009 and June 2013.[60]

Public Employees

See also: Nebraska public employee salaries and Nebraska public pensions

According to 2011 Census data, the state of Nebraska employed a total of 143,208 people.[61] Of those employees, 106,074 were full-time employees receiving a net pay of $424.1 million per month and 38,095 were part-time employees paid $36.8 million per month.[61]

The largest state employees union and the state agreed to a contract that include a pay freeze for 2011 and 2 percent pay raises in 2012-13.[33]

See also

External links

Additional reading


  1. 1.0 1.1 1.2 1.3 1.4 The Lincoln Journal Star "Budget bills sent to governor" March 27, 2012
  2. The Omaha World Herald "Governor goes along with budget bill" April 3, 2012
  3. Enacted FY2013 budget
  4. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting" April 2011
  5. Budget Process
  6. The Lincoln Journal Star "Report: Nebraska needs to overhaul how it collects, spends money" July 12, 2012
  7. State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  8. State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  9. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  10. Yahoo, The Best- and Worst-Run States in America, Nov. 27, 2012
  11. US Census Federal Aid to State and Local Governments
  12. Tax Foundation' "Monday Map: Federal Aid to State Budgets. Accessed October 15, 2013
  13. 13.0 13.1 13.2 The Omaha World Herald "Lawmakers confident they can close Nebraska's budget gap" Jan. 7, 2013
  14. FY2012-2013 Budget as Enacted
  15. FY2012-2013 Budget Amendments
  16. 16.0 16.1 16.2 The Omaha World Herald "Governor goes along with budget bill" April 3, 2012
  17. Nebraska Legislature "LB968 - Provide for deficit appropriations"
  18. LB968
  19. Nebraska Legislature "LB131 - Change provisions relating to the Cash Reserve Fund"
  20. LB131
  21. Nebraska Legislature "LB969 - Provide for fund transfers and change provisions relating to various funds"
  22. The Lincoln Journal Star "Debate opens on governor's tax cut plan" Jan. 26, 2012
  23. 23.0 23.1 The Journal Star "Nebraska lawmakers turn to budget decisions" Feb. 27, 2012
  24. Businessweek "Governors Seeking Jobs Offer Tax Breaks as Budget Woes Ease" Jan. 31, 2012
  25. Sioux City Journal "Neb. lawmakers struggle to set budget priorities" March 25, 2012
  26. LB970
  27. Businessweek "Nebraska lawmakers approve state budget bills" May 11, 2011
  28. Businessweek "Nebraska lawmakers approve state budget bills" May 11, 2011
  29. Businessweek "Nebraska lawmakers approve state budget bills" May 11, 2011
  30. General Fund Appropriations Summary
  31. Bloomberg "Neb. lawmakers face crippling 2-year budget crunch" Jan. 3, 2011
  32. The Wall Street Journal "Budget Battles Roil Straitened States" Feb. 25, 2011
  33. 33.0 33.1 33.2 33.3 33.4 The Omaha World-Herald "State budget gap shrinks" Nov. 16, 2010
  34. The Lincoln Journal Star "Federal impasse could cast uncertainty on state's economy" July 28, 2011
  35. The Journal Star "Heineman weighs in on CIR, collective bargaining issues" Feb. 23, 2011
  36. 36.0 36.1 Yahoo! News "Nebraska lawmakers told no more fat to cut" Aug. 20, 2010
  37. 37.0 37.1 Businessweek "Neb. lawmakers eye massive department for cuts" Aug. 25, 2010
  38. National Taxpayers Union, "Taxpayer Group Applauds South Carolina Governor, Nebraska Treasurer for Putting State Spending Online," October 10, 2007
  39. Treasurer Osborn on Transparency
  40. Shane Osborn, "Letter to Virginia Legislators," January 27, 2009
  41. Nebraska Spending
  42. Expenditures, Nebraska Spending
  43. State Contracts, Nebraska Spending
  44. Institute of Government and Public Affairs
  45. University of Illinois Transparency Profile for Nebraska
  46. [ University of Illinois 50 State Transparency Comparison
  47. University of Illinois State Transparency Profiles
  48. Nebraska Legislative Fiscal Office, "State of Nebraska Biennial Budget (2009 Session)," August 2009
  49. Nebraska Council of School Administrators,"Nebraska budget process," October 30,2008
  50. Nebraska Legislative Fiscal Office, "State of Nebraska Biennial Budget (2009 Session)," August 2009
  51. Nebraska Auditor of Public Accounts Web site, retrieved October 30, 2009
  52. audit reports
  53. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  54. Nebraska Administrative Services Accounting Division
  55. CAFRs
  56. Nebraska Accounting Division Web site, retrieved October 30, 2009
  57. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  58. Pew Stateline Infographic on State Credit Ratings. Accessed September 26, 2013
  59. The Lincoln Journal Star "S&P raises state of Nebraska's rating to AAA" May 6, 2011
  60. Recovery, "Stimulus Spending by State"
  61. 61.0 61.1 2008 Nebraska Public Employment U.S. Census Data