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Nebraska is outshining most other states when it comes to fiscal responsibility, and a new study confirms this using an important indicator.
When states want to fund large capital projects such as construction and infrastructure, they can take on certain kinds of debt and loans. One of these debts is a bonded obligation in which the state doesn’t pay for a project upfront, but rather pledges revenue from taxes or fees to pay for the loan.
Some states take on heavily and irresponsible debts, while others are better stewards with taxpayer money. One way to check is looking at how much each person would owe if the debt were evenly distributed among residents.
If the per-capita rate is high, the state is taking on huge debts per person in the state. If the rate is low, the state is likely making far better financial decisions. A recent study from the American Legislative Exchange Council found that Nebraska has the third-lowest bonded obligations rate per-capita.
According to ALEC’s study, states and their associated organizations issued $1.1 trillion in total bonded obligations as of 2015. That trillion dollars will be paid back through taxes and other fees on workers and residents.
When ALEC studied each state and their bonded obligations, they found that some issue bonds to such a degree that the per-capita obligation is thousands of dollars. Both Alaska and Connecticut top ALEC’s list, putting a debt burden on residents of more than $10,000 per capita just to pay off bond obligations.
But Nebraska lawmakers have been more responsible. Nebraska has the third lowest per capita bonded obligation, at just $646. Thanks to elected officials who’ve shown a commitment to fiscal responsibility and stability, Nebraska has come out near the top in this indicator of economic health.
AFP Nebraska’s state director Jessica Shelburn said Nebraska is “heading in the right direction” and urged elected officials to “continue their good stewardship of taxpayer money.”