Where Did the Money Go? An Analysis of Spending and Revenue in Nebraska and Surrounding States, 2002-2008

Policy Study

Where Did the Money Go? An Analysis of Spending and Revenue in Nebraska and Surrounding States, 2002-2008

Nebraska, like many states, is facing a significant fiscal crunch in the face of the recession and ongoing economic downturn. Its budget deficit is estimated at $679 million-about 10 percent of the two-year budget. The state received a temporary reprieve this year from Washington, D.C.-and taxpayers from across the nation-in the form of $250.6 million in federal stimulus funds, which were primarily used to help pay Medicaid and state public education costs. But that money will not be available next year. Legislative leaders have indicated that they intend to make up the difference through spending cuts, and not tax or fee increases.

The purpose of this paper is twofold: first, to look back over recent years to determine where the state’s money came from and where it went, and second, to offer a number of budget reform recommendations to help Nebraska balance the state budget while maintaining quality-of-life priorities for its citizens.

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Adam Summers is a senior policy analyst at Reason Foundation, a nonprofit think tank advancing free minds and free markets. He has written extensively on privatization, government reform, law and economics, and various other political and economic topics.

Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.

Lisa Snell is the director of education and child welfare at Reason Foundation, a nonprofit think tank advancing free minds and free markets.