Taxes in Nebraska > Users and Uses of Major State and Local Taxes


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Key Points

The chart above compares the use of tax dollars by state and local entities; the shaded areas indicate the share of tax dollars that are utilized by local entities. It is readily apparent that local governments spend more than the Nebraska state government spends for its own purposes. Local spending of major state and local tax dollars makes up 60 percent of the total, or about $3 billion. If you refer back to the Major State and Local Sources of Tax Dollars chart, you would find that the state-local shares there are almost exactly the opposite. Nebraska's state government raises about 60 percent of the major state and local taxes collected, but spends only 40 percent. The other 20 percent is given as aid to local governments. Local governments spend 60 percent of the revenue from the major tax sources, while collecting only 40 percent.

Stated in terms of dollars, the state raises about $3 billion and spends $2 billion, appropriating $1 billion in state aid to local governments. Local governments raise about $2 billion from the major tax sources and spend that plus the $1 billion that is received in state aid.

It is also evident from the chart above that spending related to K-12 schools is almost equal to total state spending.

You may may click on any of the slices of the coin above to find more detailed information on spending by each of these units of government.

State Use

State spending: Data on state uses of major state and local taxes that is provided in this section include general fund expenditures less aid to local governments which is shown under the local use of major taxes. Also included is the Department of Roads' share of the highway funds which include gas taxes, sales tax on motor vehicles and registration fees; and the variable gas tax which is retained solely by the state.

Local Use

Local taxes and local spending: Data on local uses of major state and local taxes that is provided in this section includes property taxes, city sales taxes, the city and county share of highway revenues, and state aid to local governments funded through the state general fund. Revenue sources for cities and counties such as inheritance tax, wheel tax, and franchise taxes are not included as data at the statewide level is not available.

The data is taken from different data sources, including the annual budgets filed by cities and counties with the Nebraska State Auditors office. Local spending can include things other than the major state and local tax funds described above, such as federal grant funds, miscellaneous local taxes and user fees. The budget amounts shown exclude utility revenues like electric charges, water and sewer revenues, and hospital patient fee revenues.



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Key points

The chart directly above shows in six general categories how major state and local tax revenues are used in Nebraska.

Education consumes nearly half of all the tax dollars raised in this state. Nearly $2.4 billion of the $4.9 billion in state and local taxes collected were spent on education. The ranking information linked below demonstrates that Nebraska's spending on education ranks higher than most other states both in total dollars and in the percentage of total revenue committed to this use.

About 3/4 of the tax dollars used for education were used for K-12 education, mostly by school districts and educational service units (ESUs). The other 25 percent was allocated to higher education: the university system, state colleges and community colleges.

Other high priorities include health and human services and roads, transportation, and public works. Despite spending 18 percent of its total tax dollars in the health and human services field, Nebraska still ranks lower than most states on spending per capita for health and human services and as a share of total spending.

Less surprising is the emphasis on roads, transportation, and public works. Nebraska, like other sparsely-populated states, tends to spend more on roads and streets. The ranking information linked below also supports this conclusion.



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