Nebraska state budget (2009-2010)

Note: This article was last updated in 2010. Click here for more recent information on state budgets and finances.

The state of Nebraska passed a $6.9 billion biennial budget that included general fund appropriations of $3,319,794,999 for FY2009-10 and $3,405,101,292 for 2010-11, although the legislature had reduced spending the current biennium.

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

The state would receive 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.

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.

2011 State spending & deficit in billions

Total spending	Health and human services	Bildung	Protection	Other
$3.4	$1.2	$1.5	$0.15	$0.60

2011 Local spending & deficit in billions

Total spending	Pension	Gesundheitswesen	Bildung	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

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.

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

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 would be $3.38 billion for FY 2010 and $3.56 billion for FY 2011. Total funds would be $8.4 billion for FY 2010 and $8.6 billion for FY 2011 compared to $8.2 billion for FY 2009.

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

• 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. Heading into the next budget period beginning July 1, 2011, an estimated balance of about $320 million would be in the cash reserve fund.

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%. Those averages may be overly optimistic in this tough economic climate and if tax revenues increase more slowly than anticipated, the budget deficit would only increase.

Sales that were taxed bring in only about $1.7 billion to the state and cities, and Nebraska had 27 pages of tax exemptions, which was quite long when compared to neighboring states. Thus, lawmakers look at removing exemptions to bring in more revenue when the state budget was pinched, as they did to helped solve the state's fiscal crisis in 2002-03, and by early August 2010, the discussion of rescinding the exemptions fired up again.

Budget background

See also: Nebraska state budget and finances

Nebraska operates on a biennium, covering two fiscal years at a time. The fiscal biennium began on July 1, 2009 and ended 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 to the Legislature. Following a series of hearings and meetings the Nebraska Unicameral makes necessary amendments prior to returning the budget document to the Governor. The Governor has five 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.

A budget enacted for a fiscal year can be amended or changed up to the last day of that fiscal year. Deficit appropriations are changes made to the originally enacted appropriations. There are several chances to amend a biennial budget once it has 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.

Budget figures

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

Fiscal Year	Expenditures (billions)	GDP (billions)
2000	$10.8	$55.5
2001	$11.6	$57.4
2002	$12.5	$59.9
2003	$13.3	$64.6
2004	$14.1	$68.4
2005	$14.3	$71.2
2006	$15.3	$75.3
2007	$16.3	$80.1
2008	$17.4	$85.2
2009	$18.6*	$90.6*

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

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 is 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 is one of six offices making up the executive branch of Nebraska State Government. Nebraska's audit reports were published online.

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 included significant liabilities for the pension plans and for other post employment benefits, such as health care. Nebraska's CAFRs were published online by the Nebraska Administrative Services Accounting Division.

Paul Carlson was State Accounting Administrator. State Accounting is 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).

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

Budget transparency

NebraskaSpending.com is 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. Cost estimates for creating online transparency websites 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.

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 wrote:

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!

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	Y	Y	N	Y	N

Economic stimulus transparency

• Nebraska would receive approximately $122 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.
• The state received an estimated $871,442,210 from the American Recovery and Reinvestment Plan of 2009.
• Nebraska established an economic recovery website to show how legislators and government officials in Nebraska were spending Federal funds.

See also

• Nebraska government sector lobbying
• Nebraska public pensions

External links

• State Budget Solutions, Nebraska
• Nebraska Taxpayers for Freedom
• Platte Institute for Economic Research
• Nebraska Tax Research Council
• NebraskaSpending.com, official website
• Nebraska Office of the Treasurer
• Comprehensive Annual Financial Report
• Nebraska State Auditor
• Nebraska Department of Administrative Services, State Budget Division
• Nebraska Department of Revenue
• Nebraska Government spending
• Model transparency legislation from the American Legislative Exchange Council was available at this link.
• Video of Governor Dave Heineman's Interview on Nebraska Economic Conditions

Additional reading

• Nebraska Governor, "2010 State of the State Address," January 14, 2010
• Wall Street Journal, Nebraska sets the standard on government accountability, March 14, 2009
• Gov. Dave Heineman, "2009 State of the state address," January 15,2009
• State of Nebraska, "Executive budget 2009-2011 biennium," January 15,2009