The Honorable Mike Johanns, Governor
Members of the Legislature
Citizens of the State of Nebraska
It is my pleasure to submit the Annual Budgetary Report for the year ended June 30, 2000.
The budgetary report contains detailed budget and accounting information based on the State's programmatic budgeting system. It is not intended to report financial information in accordance with Generally Accepted Accounting Principles (GAAP) since the State's budgetary system differs significantly from GAAP. A Comprehensive Annual Financial Report (CAFR) will be prepared in a format prescribed by the Governmental Accounting Standards Board (GASB) and other authoritative sources.
The purpose of the Annual Budgetary Report is to show compliance with the Legislature's appropriation mandates at the program level and to provide additional information on revenues and expenditures that are not generally presented in the State's CAFR.
Accounting System and Budgetary Control
The Nebraska Accounting System (NAS) is an automated, centralized accounting system that was developed and implemented beginning with fiscal year 1983. NAS and the budgetary system are essentially on a cash basis in which revenues are recognized when received rather than when earned and expenditures recognized when paid rather than when incurred. In developing and evaluating the State's accounting system, consideration is given to the adequacy of internal controls. We believe that the State's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.
The State utilizes eight fund types as follows:
GENERAL FUND - To account for activities funded by general tax dollars, primarily sales and income taxes.
December 6, 2000
CASH RESERVE FUND - To account for financial resources used as a reserve for the General Fund if the General Fund balance should become inadequate to meet current obligations.
CASH FUNDS - To account for the financing of goods or services provided by a State agency to individuals or entities outside of state government on a cost-reimbursement basis.
CONSTRUCTION FUNDS - To account for financial resources to be used for the acquisition or construction of major capital facilities.
FEDERAL FUNDS - To account for the financial resources related to the receipt and disbursement of funds generated from the federal government as a result of grants or contracts.
REVOLVING FUNDS - To account for the financing of goods or services provided by one State agency to another State agency on a cost-reimbursement basis.
TRUST FUNDS - To account for assets held in a trustee capacity.
DISTRIBUTIVE FUNDS - To account for assets held as an agent for individuals, private organizations, and other governments and/or other funds. Since by definition, Distributive Fund receipts and disbursements are reported in asset or liability accounts, the Distributive Fund type is shown only on the State's Schedule of Assets, Liabilities, and Fund Equity arising from Cash Transactions.
The State's budgetary control is maintained at the program level. A program is an activity or goal to be accomplished with the resources provided. Resources for a program will frequently be derived from more than one fund type as indicated in the Schedule of Budgeted and Actual Expenditures Paid by Program on pages 14 to 43 of this report.
Summary of 2000 Financial Operations - General Fund
During fiscal year 2000, the State's General Fund Balance increased by $21,885,366 resulting in a fund balance of $313,238,227 and a cash balance of $314,820,657 at June 30, 2000.
Following are the tax rates that were in effect during the past three calendar years:
Individual Corporate Sales
Income Tax Income Tax
Effective Date Rate (1) Tax Rate (2) Rate
January 1, 1997 2.51 to 6.68% 5.58 & 7.81% 5.00%
July 1, 1998 2.51 to 6.68% 5.58 & 7.81% 4.50%
1, 1999 2.51 to
6.68% 5.58 & 7.81% 5.00%
December 6, 2000
(1) The Individual Income Tax Rate ranges from 2.51 to 6.68% of Nebraska income. Nebraska income is based on federal adjusted gross income minus a standard deduction or itemized deduction. A personal exemption credit replaced the deduction for personal exemptions in 1993. The personal exemption credit was $89 for calendar year 1999. The credit is phased out as federal adjusted gross income increases for higher income taxpayers.
(2) The Corporate Income Tax Rate is 5.58% of the first $50,000 of taxable income and 7.81% of the excess.
Highlights of General Fund revenue collections (net of refunds) are summarized below:
Your questions or comments on the contents of this report are welcome.
Paul R. Carlson
State Accounting Administrator