Clear thinking for
a stronger Nebraska
About OpenSky Policy
Institute
We are a non-partisan think tank
focused on fiscal policy in Nebraska.
Our mission is to improve opportunities
for every Nebraskan by providing
impartial and precise research,
analysis, education, and leadership.
Importance of the State Budget
• Nearly 300,000 students are educated by 22,000 teachers in over 1,000
public schools each year
• More than 107,000 students attend the University of Nebraska, state
colleges, and community colleges each year
• Almost 10,000 miles of highway and over 3,500 bridges are maintained
(enough road to reach nearly halfway around the earth)
• More than 137,000 children receive health care through Medicaid each
month
• More than 7,000 Nebraskans are cared for in state nursing facilities
each month
• More than 4,500 inmates are housed each month in the state
correctional system
• 175,000 professional licenses are overseen, including for more than
7,500 physicians, 35,000 nurses, 3,500 pharmacists, 7,000 mental
health professionals, 1,500 dentists, and 1,000 veterinarians.
Education, Health Care Top SpendingGeneral Fund Expenditures, FY 11-12
Total: $3.45 billion
Sources: OpenSky analysis of
data from Legislative Fiscal
Office and Department of
Administrative Services
Accounting Division
Note: Percentages do not sum
to 100 due to rounding
K-12 Education, $1,024,084,084 ,
30%
Higher Education,
$627,403,585 , 18%
Health and Human Services (Non-Medicaid), $663,934,522 ,
19%
Medicaid & CHIP,
$576,385,969 , 17%
Public Safety and Law Enforcement
$317,672,714 9%
General Government$156,629,137
5%
Agriculture, Environment &
Natural Resources$38,273,197
1%
Humanities$17,939,902
<1%
Transportation and Infrastructure$16,908,088
<1%
Labor and Economic
Development$6,476,974
<1%
State Spending in Nebraska Has FallenGeneral Fund Appropriations per $1,000 of NE Personal Income,
FY 98-99 to FY 14-15
Sources: Department of Administrative Services Accounting Division and Budget Division, Legislative
Fiscal Office, Nebraska Economic Forecasting Board, Congressional Budget Office, and US Bureau of
Economic Analysis data.
$41
$42
$43
$44
$45
$46
$47
$48
$49
$50
$51
FY 99-00 FY 01-02 FY 03-04 FY 05-06 FY 07-08 FY 09-10 FY 11-12 FY 13-14
Spending Trends in Major Budget AreasGeneral Fund Appropriations per $1,000 of Nebraska
Personal Income
Sources: NE Legislative Fiscal Office, US Bureau of Economic Analysis
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
FY99-00
FY01-02
FY03-04
FY05-06
FY07-08
FY09-10
FY11-12
FY13-14
K-12 Education
Medicaid + CHIP
Health and HumanServices (Non-Medicaid)
Higher Education
Public Safety andLaw Enforcement
Transportation and Infrastructure Spending has
DeclinedGeneral and Cash Fund Expenditures
per $1,000 of Nebraska Personal Income
Sources: OpenSky analysis of Department of Administrative Services Accounting Division, Legislative
Fiscal Office, and US Bureau of Economic Analysis data.
$10
$11
$12
$13
$14
$15
$16
FY 99-00 FY 01-02 FY 03-04 FY 05-06 FY 07-08 FY 09-10 FY 11-12
Aid to Local Governments Has DeclinedState aid to local governments, adjusted for economic growth,
FY 00-01 to FY 13-14
Sources: OpenSky analysis of State Auditor of Public Accounts local budgets, Legislative Fiscal Office, Department
of Revenue, and US Bureau of Economic Analysis Personal Income data.
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
FY 01-02 FY 03-04 FY 05-06 FY 07-08 FY 09-10 FY 11-12 FY 13-14
Mil
lio
ns
Total
Aid to K-12Schools
Aid toMunicipalities
Aid toCounties
$15
$20
$25
$30
$35
$40
$45
$50
$55
FY 79-80 FY 84-85 FY 89-90 FY 94-95 FY 99-00 FY 04-05 FY 09-10
State Aid Total Local Taxes
State Aid and Local Taxes Have Mirrored Each OtherAid and Taxes per $1,000 of Nebraska Personal Income
Sources: US Census Bureau, Survey of State & Local Governments; US Bureau of Economic Analysis
Most Revenue for State Budget Comes from
Sales and Individual Income TaxesGeneral Fund Tax Revenues, FY 12
Total: $3.61 billion
Sources: Department of
Administrative Services Accounting
Division, Annual Budgetary Report
(December 2012).
* Other taxes are primarily Business
and Franchise Taxes and special
income taxes on fiduciary income
and financial institutions.
Individual Income
$1,808,244,570 50%Sales and Use
$1,436,909,372 40%
Corporate Income
$234,266,238 7%
Excise$73,477,570
2%
Other*$53,431,064
1%
Nebraska’s Three-Legged StoolState and Local Taxes by Type, FY 10-11
Source: US Census Bureau, State and Local Finances data
Personal Income
22%
Corporate Income
2%
Property Tax37%
General Sales22%
Selective Sales
9%
Other8%
Nebraska’s Tax System is RegressiveState & Local Taxes in 2010
Shares of family income for non-elderly taxpayers
Source: Institute for Taxation and Economic Policy
–3%
–2%
–1%
—
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
Lowest 20% Second 20% Middle 20% Fourth 20% Next 15% Next 4% TOP 1%
Total Sales & Excise Taxes Property Taxes
Income Taxes Federal Deduction Offset
Effect of Cutting Personal Income Tax Rates to 2.25%,
4.75% and 5.5%Average Annual Tax Change by Income Group, 2013 Income Levels
Total Annual Cost to State: $353 Million
Sources: Institute for Taxation and Economic Policy
$122 $230 $346$766
$1,768
$8,509
Lowest 20%(<$21k)
Second 20%($21k-$36k)
Middle 20%($36k-$58k)
Fourth 20%($58k-$88k)
Next 15%($88k-$161k)
Next 4%($161k-$371k)
Top 1%(>$371k)
The Real Taxpayers of Nebraska
The Real Taxpayers of Nebraska
Cutting Income
Taxes Doesn’t Spur
Economic Growth
Nebraska Economic Growth Higher than
Neighbors with Lower Top Income Tax RateGrowth in Real GDP Per Capita, 2003-2012
Source: OpenSky Analysis of US Bureau of Economic Analysis Data
-0.8%
2.1%
6.7%
8.6%
8.8%
11.5%
12.8%
-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%
Missouri(10 brackets, 6% top rate)
Colorado(flat 4.63% rate)
Wyoming(no state income tax)
South Dakota(no state income tax)
Kansas(2 brackets, 4.9% top rate)
Nebraska(4 brackets, 6.84% top rate)
Iowa(9 brackets, 8.98% top rate)
Economic Growth in States with High
Income Taxes and No Income TaxesGrowth in Real GDP Per Capita, 2003-2012
Source: OpenSky Analysis of US Bureau of Economic Analysis Data
-3.8%
-3.1%
-0.6%
2.1%
2.2%
3.3%
4.7%
6.6%
6.9%
7.6%
8.5%
9.2%
9.3%
9.8%
11.2%
11.3%
12.0%
13.8%
32.0%
-10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
Nevada
Florida
Ohio
New Jersey
Maine
Tennessee
California
Wyoming
New Hampshire
Hawaii
South Dakota
Vermont
Alaska
Washington
Nebraska
Maryland
Texas
New York
Oregon
Example: Income Tax Cuts in Kansas
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(402) 438-0384 or (402) 250-4518