State Budget Practice Report Cards and Budget Resource Guide
Nebraska’s string of high average grades for fiscal 2017 through 2019—two As and two Bs—was broken only by a C in reserve funds.
While forty-three states had rules to guide the disbursement of rainy day funds during the evaluation period, Nebraska did not. It also failed to link its Cash Reserve Fund balances or contributions to historical revenue volatility. These policies were among best practices that a recent Volcker Alliance working paper, Rainy Day Fund Strategies: A Call to Action, urged states to adopt.
One of Nebraska’s A averages was in budget forecasting. The Nebraska Economic Forecasting Advisory Board provides the state’s consensus revenue estimates. The board’s nine members, who are appointed by the unicameral legislature and the governor, must have expertise in economics or tax policy. The board meets at least twice annually to consider revenue estimates provided by the executive branch’s Revenue Department and the legislature’s Fiscal Office. Nebraska’s revenue and expenditure forecasts cover four years, one year more than the Alliance’s minimum standard for grade credit.
The state also averaged an A in legacy costs, which cover public worker pensions and other postemployment benefits (OPEB), principally health care. For 2017–19, Nebraska exceeded the actuarially determined contribution to its pension system; it was one of only seven states with pensions funded at 90 percent or higher as of 2018. Its OPEB plan was too small to play a role in its category grade.
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 found here contain grades of the state's budgetary practices during the fiscal years of 2017 through 2019. Each state received marks in five critical categories, based on their adherence to best practices in several key budgeting indicators. The five categories covered methods used to achieve budgetary balance as well as how budgets and other financial information are disclosed to the public.
States received grades of A to D-minus (there are no “failed states”) for their procedures in estimating revenues and expenditures; their use of one-time actions to balance budgets; how they oversee and use rainy day funds and other fiscal reserves; the adequacy of their funding of public worker retirement and other postemployment benefits; and the quality of transparency of budget and related financial information. The grades are based on research conducted by public finance and budgeting professors and students at eight US schools of public administration or policy. The universities’ research efforts were augmented by Volcker Alliance staff, data consultants at Municipal Market Analytics, and special project consultants Katherine Barrett and Richard Greene.
State Budget Sources
State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses is a resource published by the Volcker Alliance designed to help public officials, policy advocates, journalists, academics, and concerned citizens fully understand the critical fiscal decisions that governors and legislators must make. The guide includes the links below to budgets for this state as well as legislative analyses of budget bills and treasurers’ or comptrollers’ monthly state cash-flow statements; capital spending plans; reports on public-worker pension funding and returns; and reports by local and national fiscal research organizations, bond rating firms, and associations of state fiscal and finance officials.