Rumors of Nebraska’s Impending Bankruptcy Are False

Have you seen the claims on social media that Nebraska will be “bankrupt within six months”? Here’s a compilation video with nearly 400,000 views of people ranting, and making fun of Nebraska for voting for Trump, which in turn decimated their undocumented labor force. Only problem is, none of it appears to be true. Neither I, or any AI I tried, could find any mention outside of these social posts confirming the State of Nebraska being in financial peril. In fact, quite the opposite – Nebraska

The claim is that 70% of the workforce is undocumented, though the number is actually more likely 40% according to FarmAid.

40% is still a very large number, and if indeed those workers have disappeared the Nebraska farmers do indeed have a big labor problem. But that doesn’t equate to bankruptcy at the state level.

State Financial Reports and Budget Status

A review of official financial data, expert analyses, and statements from state officials shows no evidence that Nebraska is anywhere near insolvency. On the contrary, Nebraska’s finances appear stable. I examined the state’s budget reports, debt levels, economic indicators, and responses from officials to assess the validity of these bankruptcy rumors.

Official budget documents show Nebraska in a solid fiscal position. The most recent biennial budget closed with a healthy surplus above required reserves. At the end of the 2024 legislative session, Nebraska’s enacted budget had an ending balance $521.2 million above the minimum 3% reserve requirement​

In practice, this means the state not only met its mandated “rainy day” reserve, but exceeded it by over half a billion dollars. Nebraska has also built up a sizeable Cash Reserve Fund (rainy day fund) of roughly $900 million​to buffer against any economic downturns or revenue shortfalls. These reserves provide a significant cushion and are far from a scenario of a cash-strapped government.

Looking at annual financial statements reinforces this stability. Nebraska’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2024, shows the state’s General Fund balance increased by $513 million that year, reaching a fund balance of $4.14 billion​

Revenues came in well above projections while expenditures were below budget, contributing to this surplus​

Nebraska’s state debt-to-GDP ratio falls in the 2-3% range, which is very low compared to other states. The state is fiscally conservative and sets constitutional limits on borrowing, so debt is not a problem.

In short, Nebraska ended the year with more money than expected, and less debt than it’s peers. There is no indication in these official reports of an inability to pay bills or a pending financial collapse. By law, Nebraska must balance its budget each year, and the data shows it has done so with room to spare.

Conclusion: Nebraska’s Financial Stability vs. the Rumors

I could go on with a lot more data (see sources below), but after examining official reports, financial expert opinions, news coverage, and statements by Nebraska officials, there is no factual basis for the claim that Nebraska will be bankrupt in six months.

Sources:

• State of Nebraska Legislative Fiscal Office – 2024 Budget Highlights (General Fund status and reserves)​nebraskalegislature.gov​
• State of Nebraska 2024 ACFR – (Annual financial report showing fund balances and surplus)​das.nebraska.gov​das.nebraska.gov
• Moody’s & Nebraska Dept. of Economic Development – Nebraska Debt Lowest in Nation ​sites.nppd.com​sites.nppd.com
• Standard & Poor’s Credit Ratings – (Nebraska’s AAA credit rating and outlook)​en.wikipedia.org
• Tax Foundation (Jared Walczak & Abir Mandal) – Nebraska Property Tax Relief Options (note of $1.9B surplus) ​taxfoundation.org
• Nebraska Public Media News – State of the State coverage ​nebraskapublicmedia.org​nebraskapublicmedia.org
• Panhandle Post / Nebraska Examiner – Gov. Pillen’s Budget Proposal ​panhandlepost.com
• Omaha Daily Record / Nebraska Examiner – Appropriations Chair on Budget panhandlepost.com
• Governor of Nebraska – Press Release ​governor.nebraska.gov.

The main conclusion I think we can draw here is that there is rampant information being presented on BOTH sides of the political spectrum. And People are falling victim to confirmation bias every time they hear something that seems like it just “sounds right”. We all need to be vigilant about doing actual fact checking before we believe what is being presented – no matter how many people seem to be jumping on board.