Nebraska

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How Does Nebraska Compare to Other States?

Nebraska ranks 4th among US states for its fiscal health, based on its fiscal solvency in five separate categories.

Nebraska’s strong fiscal performance in FY 2013 was driven by exceptional fiscal performance across all measures. The state had three to four times the amount of cash needed to cover short-term bills. Its revenues exceeded expenses by 7 percent. On a long-term basis, Nebraska outperformed all other states with long-term liabilities totaling 3 percent of total assets. Nebraska carried very low levels of debt, totaling $29 million, or $16 per capita. While Nebraska had low levels of unfunded pension liabilities relative to other states, unfunded liabilities on a guaranteed-to-be-paid basis total amounted to $13 billion, which was larger than the state estimates.

See “Ranking the States by Fiscal Condition” for a complete explanation of the methodology used to calculate Nebraska’s fiscal health rankings. 

1. Nebraska ranks 9th in terms of cash solvency.

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 cash position was very strong. The state had available three to four times the amount of cash needed to cover short-term spending, placing it far above the national average. 

 

Cash ratio

          Quick ratio

       Current ratio

Nebraska

3.40

4.39

4.59

National average

2.23

3.02

3.37

2. Nebraska ranks 15th in terms of budget solvency.

Budget solvency measures whether a state can cover its fiscal year spending out of current revenues. Did it run a shortfall during the year? Nebraska’s operating ratio of 1.07 indicates the state’s revenues exceeded expenses by 7 percent, and the state realized a surplus of $306 per capita in FY 2013.

 

Operating ratio

Surplus (deficit) per capita

Nebraska

1.07

$307

National average

1.07

$473

3. Nebraska ranks 1st in terms of long-run solvency.

Long-run solvency measures whether a state has a hedge against large long-term liabilities. Are there enough assets available to cushion the state from potential shocks or long-term fiscal risks? Nebraska’s net asset ratio of 0.28 indicates that after meeting its long-term obligations, the state had excess assets of 28 percent relative to total assets. (Net assets are those left over after the government has paid its debts. They are a subset of total assets, which also include capital and government buildings. The net asset ratio measures the total of restricted and unrestricted assets, or net assets, as a portion of total assets.) Nebraska’s long-term liability ratio was very strong. Long-term liabilities accounted for 3 percent of the state’s total assets. Total liabilities per capita were one-tenth the national average at $254 per capita. 

 

Net asset ratio

Long-term liability ratio

Long-term liability per capita

Nebraska

0.28

0.03

$255

National average

0.03

0.40

$2,768 

4. Nebraska ranks 6th in terms of service-level solvency.

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’s total taxes were 5 percent of state personal income, lower than the national average. Revenues and expenses as a percent of total state personal income were 10 percent and 9 percent respectively, also lower than average.

 

Tax to income ratio

Revenues to income ratio

Expenses to income ratio

Nebraska

0.05

0.10

0.09

National average

0.06

0.14

0.13

5. Nebraska ranks 1st in terms of trust fund solvency.

Trust fund solvency measures how much debt a state has. How large are unfunded pension liabilities, other postemployment benefits (OPEB) liabilities, and state debt compared to the state personal income? Nebraska had among the lowest levels of debt in the nation. Unfunded pension obligations represented 15 percent of total state personal income, nearly half the national average. (Pension benefits are recalculated based on a discount rate of 3.38 percent to account for the government’s guarantee to pay employees earned benefits.) Nebraska did not report any OPEB liabilities in FY 2013; its debt levels were very low.  

 

Pension to income ratio

OPEB to income ratio

Debt to income ratio

Nebraska

0.15

n/a

0.00

National average

0.29

0.04

0.04

n/a: not available.

State debt 

State debt is calculated from each state’s Comprehensive Annual Financial Report. In FY 2013 Nebraska held no general obligation debt. Total government debt was $29 million—only $16 per capita—a fraction of the national average. 

General obligation bonds

Total primary government debt

State personal income

Ratio of debt to state personal income

Total primary debt per capita

Nebraska

$0

$0.29 billion

$88.11 billion

0.0%

$16

National average

$6.08 billion

$12.60 billion

$282.05 billion

4.0%

$1,824

Pension liability

Pension liability is calculated from each state’s pension actuarial reports. At $13 billion, Nebraska’s unfunded pension liabilities were larger than state estimates but lower than the national average.

Unfunded pension liability

Funded ratio

Market value of unfunded liability (risk-adjusted discount rate)

Market value of funded liability ratio

Nebraska

$2.49 billion

79%

$13.57 billion

41%

National average

$19.85 billion

70%

$78.79 billion

40%

OPEB liability 

OPEB liability is calculated from each state’s Comprehensive Annual Financial Report. Nebraska did not report any OPEB liabilities in FY 2013.

 

Total unfunded OPEB liability

Funded ratio

Nebraska

n/a

n/a

National average

$10.84 billion

11%

n/a: not available.