Nebraska

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Summary

On the basis of its fiscal solvency in five separate categories, Nebraska ranks second among the US states and Puerto Rico for its fiscal health. Nebraska exhibits strong fiscal health across all categories. On a cash basis, Nebraska has between 3.81 and 5.02 times the cash needed to cover short-term liabilities. Revenues exceed expenses by 7 percent, producing a surplus of $294 per capita. On a long-run basis, net assets are 30 percent of total assets, and total liabilities are 3 percent of total assets. Total debt is $23 million. Unfunded pension liabilities are $13.94 billion on a guaranteed-to-be paid basis. Total debt and unfunded liabilities are equal to 16 percent of state personal income.

Key Terms

  • Cash solvency measures whether a state has enough cash to cover its short-term bills, which include accounts payable, vouchers, warrants, and short-term debt. (Nebraska ranks 9th.)
  • Budget solvency measures whether a state can cover its fiscal year spending using current revenues. Did it run a shortfall during the year? (Nebraska ranks 14th.)
  • Long-run solvency measures whether a state has a hedge against large long-term liabilities. Are enough assets available to cushion the state from potential shocks or long-term fiscal risks? (Nebraska ranks 1st.)
  • Service-level solvency measures how high taxes, revenues, and spending are when compared to state personal income. Do states have enough “fiscal slack”? If spending commitments demand more revenues, are states in a good position to increase taxes without harming the economy? Is spending high or low relative to the tax base? (Nebraska ranks 7th.)
  • Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities, OPEB liabilities, and state debt compared to the state personal income? (Nebraska ranks 1st.)

For a complete explanation of the methodology used to calculate Nebraska's fiscal health rankings, download the full paper and the dataset at mercatus.org/statefiscalrankings-2016-edition.