Nebraska

State Budget Practice Report Cards and Budget Resource Guide

Nebraska was one of only eight states to average an A in legacy costs for fiscal 2016 through 2018. Its annual contributions to its public worker pension system were in line with actuarial determinations, and the plan had 90.2 percent of the assets needed to meet promised benefits as of 2017—almost 22 percentage points over the US total. Because Nebraska offers minimal health benefits to public worker retirees, it does not face the long-term unfunded liabilities—or the need for advance funding—for postemployment costs that most other states do. 

The state’s lowest mark was a C average in reserve funds. Nebraska failed to tie reserves to revenue volatility, and even though a cash reserve is mandated by statute, there are no clear guidelines for use of the funds. 

While Nebraska’s mark in budget maneuvers fell to a B in 2018 from an A in 2016 and 2017, it averaged an A for the three years studied. The 2018 drop was caused by the use of $61.2 million in one-time transfers to the general fund from special funds. They included $15 million from the Roads Operations Fund, $20 million from the Medicaid Intergovernmental Transfer Trust Fund, and $9 million from the Game and Parks Capital Maintenance Fund. A few transfers were made in 2017, but they were not large enough to lower the state’s grade in the category that year.

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To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.

The report cards presented here are taken from the 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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