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With its wide open spaces, vibrant local communities, and a world renowned worth ethic, Nebraska would not appear to be dominated by government. Despite superficial appearances, the actual numbers tell a very different story. State and local governments in Nebraska collectively spend over $16 Billion annually. In terms of each of Nebraska’s 1.9 million people, that is over $8,500 per person each year.
Every 10 years the United States Census Bureau conducts a census of governments. Data from the last decennial census of state and local governments in Nebraska presents some startling facts. Despite ranking 38th in the nation for population, Nebraska’s 2,659 local governments place us in the 14th spot for absolute number of local governments. As a state, we rank high in the number of city, county, and township governments. However, almost half of the total number of local governments in Nebraska are classified as “special government districts”. These include Natural Resources Districts, Country Fair Boards, Sanitary and Improvement Districts, Educational Service Units, and the myriad of other local government entities that approach 1,300 in number. Nebraska law creates over 30 different types of political subdivisions, all of which have authority to spend tax dollars. Most have the ability to levy property taxes. The area of Douglas County alone contains 214 different governmental entities.
According to Census Bureau data, just the general administration costs alone to maintain each of these government bodies costs each Nebraskan $275 a year. Education expenses by far constitute the largest portion of government spending at 38%. In comparison, transportation is fourth in proportion, making up 9% of the total, while public safety, at 7%, ranks fifth.
After education, the second largest piece of state and local spending is public welfare at 17% of the total, more than roads and public safety combined. Spending on hospitals and health also outranks traditional government roles at 10% of the total reported by the Census Bureau. Of the total statewide tax expenditures, 63% of the spending is by the 2,659 local governments.
Nebraska’s tax policy is inextricably linked to the spending decisions made by elected and appointed officials managing thousands of governments across Nebraska. Each spending decision must be backed by a tax. While the central focus of tax policy is on the Legislature and state budget decisions, the simple numbers indicate the largest proportion of taxing and spending decisions are made by local governments.
The vast network of local governments make it difficult for taxpayers to see the total, transparent picture of tax policy. It also makes setting priorities impossible, as each local entity has their own priorities that do not have to align with the spending decisions of any other local government. Rather, it is up to each individual government, and elected or appointed public official, to evaluate its role in the total tax asking of Nebraska taxpayers. Every spending decision by even the smallest local district contributes to the $8,500 per person annual total.
The justification for so many different governments in Nebraska is often described as “local control”. However, the privilege of local control comes with accountability for those decisions. Evidence based spending decisions are as important by local boards as they are the state government. Recognizing the magnitude and scope of government in Nebraska is only the first step. Next week I will examine some policy option for improving the transparent and accountable use of all of the $16 Billion spent by state and local governments in Nebraska.