Nebraska Gets a “B” For Its State Finances

Unlike in most states, Nebraska’s elected officials have only promised the amount of benefits they can afford to pay. Consequently, Nebraska’s finances are in good health. The state has enough money to pay all of its bills with a leftover surplus of $1.7 billion, according to Truth in Accounting's (TIA) analysis of Nebraska's most recent financial filings. When broken down, this equates to a taxpayer surplus of $2,600 for each Nebraska taxpayer, which makes it a Sunshine State according to TIA.

These statistics are good for Nebraska, but what's troubling is that state government officials continue to obscure large amounts of retirement debt on their balance sheets, despite new rules to increase financial transparency. This skewed financial data gives state residents a false impression of their state's overall financial health.

Truth in Accounting is a Chicago-based nonprofit think tank that analyzes state financial reports when they are published. According to its report for 2016, Nebraska has $4.6 billion available in assets to pay $2.9 billion worth of bills. This means that Nebraska has $1.7 billion available after bills have been paid, which breaks down to $2,600 per taxpayer. TIA's Taxpayer Surplus™ measurement incorporates both assets and liabilities, not just pension debt.

Because of an accounting rule implemented last year, Nebraska had to report its pension debt on its balance sheet. This year, the state's reported pension debt grew from $181.7 million in 2015 to $331.3 million in 2016. However, Nebraska still excludes $111.1 million of liabilities because outdated pension valuations were used in the preparation of the financial statements. Unlike most states, Nebraska doesn’t have any retiree health care debt, which is one of the reasons why it is in good shape.

The bottom line is that Nebraska has enough money to pay its bills, so it received a ”B” for its finances. A "B" grade is given to states with a taxpayer surplus™ between $100 and $5,000.

See how Nebraska compares to Iowa, Kansas and Wyoming: http://www.statedatalab.org/c/Ed9MfA6s6f84976
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.