Budgitary Matters.

The state of Nebraska, is a state whose main source of revenue is from agriculture, at least that is if you live out west, in the eastern part of the state lie the two biggest cities in the state Omaha, with a population of 408,958, and Lincoln, the state capitol with a population of 258,379, the state in total has a population of 1,826,341 people according to the 2010 US Census.

The state has 12 ways in which it collects its revenue

  1. Income Tax $1,675,922,000 (22.97%)
  2. Sales and Use Tax $1,452,362,000 (19.9%)
  3. Petroleum Tax $307,005,000 (4.21%)
  4. Excise Tax $132,779,000 (1.82%)
  5. Business and Franchise Tax $79,115,000 (1.08%)
  6. Other Taxes $13,436,000 (0.18%)
  7. Federal Grants $2,865,989,000 (39.27%)
  8. License, Fees, and Permits $266,899,000 (3.66%)
  9. Charges for Services $96,165,000 (1.32%)
  10. Investment Income $212,353,000 (2.91%)
  11. Rents and Royalties $49,286,000 (0.68%)
  12. Other Revenue $54,937,000 (0.75%)
  13. Surcharge $91,279,000 (1.25%)

The state biennial budget is $7,278,788,937, the state has a projected shortfall in FY12-13 of $347 million 9.8% of the Fiscal year budget, in which case the legislature will have to be called into a special session to balance the budget as Nebraska by constitutional law is not allowed to have a deficit.

During this last legislative session there was a report done by open sky policy institute here in Lincoln, Nebraska, its findings showed that the state’s tax system was outdated, the last time the state had any kind of tax reform was in 1967 when the sales tax was introduced, the state collects about $3.3 billion, but has and expenditure account of $4.4 billion, which is why 14 of the last 16 fiscal years have had to convene a special session of the state legislature to balance the state budget.

The state spends almost all its budget between just seven state agencies

  1. Department of Education $1,383,356,452
  2. Department of Health & Human Services$2,954,577,145
  3. Department of Revenue $238,545,713
  4. Department of Roads $717,002,239
  5. University of Nebraska $502,278,349
  6. Department of Administrative Services, $201,178,478
  7. Department of Corrections $178,619,450

There are a grand total of ninety-nine state agencies minus those seven that amount to over six billion dollars the other ninety-two agencies are then to split the remaining $1,103,231,111.
Governor Heineman has been in the process of how to create a new tax system capable of handling today’s economic needs, it’s been said he is possibly considering removing the state sales tax, which many state senators have opposed to.

As of June 30,2012 the appropriations by fund are

  1. General $3,454,362,001  47.46%
  2. Cash $1,457,469,454  20.02%
  3. Construction $14,027,233 0.19%
  4. Federal $2,135,815,595  39.34%
  5. Revolving $217,114,654  2.38%
  6. Total $7,278,788,937

LB 970 the Governor and State Senator Deb Fisher’s plan of middle class tax relief lowered income tax rates from

  • Bracket 1. 2.56% to 2.46%
  • Bracket 2. 3.57% to 3.51%
  • Bracket 3. 5.12% to 5.01%
  • Bracket 4 remained unchanged at 6.84%

It will be interesting how the Governor, and the State Legislature play alone on reforming Nebraska’s tax system, which only happens once every 50 years it seems.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s