State Budget Practice Report Cards and Budget Resource Guide
With no state general obligation or revenue debt outstanding, Nebraska has taken a cautious approach to its public purse that has won it mostly high average budgetary grades for fiscal 2015 through 2019.
In legacy costs, Nebraska’s 93 percent pension funding level as of 2019 and its consistent use of actuarially determined contributions helped the state earn a top A average for the period. Nebraska was one of only eight states with a pension funding level over 90 percent. To ensure adequate contributions, Nebraska rules require that any annual appropriation less than the actuarial recommendation be made up the following year. The state’s minimal retiree health coverage has left it with zero unfunded other postemployment benefit (OPEB) liabilities. While it allows retirees under the age of 65 to remain in the state health plan, it does not offer health benefits to retirees over that age.
The state also averaged an A in budget maneuvers because of its general avoidance of one-time actions to achieve balance. It did, however, move about $50 million from special funds, including the Department of Insurance Cash Fund, into the general fund in 2018 and 2019. Along with cuts in appropriations, the cash shifts were made in the face of unexpectedly low revenue growth rates.
Nebraska’s lowest grade was a C average in reserve funds. While state policy keeps its reserve replenished by requiring that revenues exceeding a certified estimate be deposited in the Cash Reserve Fund Nebraska lacks similar formal policies for disbursing reserve dollars. It did dip into the account in 2018 and 2019 to close revenue shortfalls.
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 2015 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.