Freedom in the 50 States

Nebraska is a state of extremes within our economic freedom dimension. It is the fourth-best state on regulatory policy but is 45th on fiscal policy. Like other Great Plains states, Nebraska has usually had very good regulatory policy. But Cornhuskers have long suffered from poor fiscal policy, which has only gotten worse in the past decade or so. Nebraska went from 48th on personal freedom in 2000, to 20th in 2016, to 40th in 2022.

Nebraska is fiscally decentralized but highly taxed, with lower-than-average state tax revenues (about 6.1 percent of adjusted personal income, up from 4.9 percent in FY 2010) and much higher-than-average local tax revenues (4.9 percent of income). Debt is lower than average, but so are assets. Public employment is above average at 12.4 percent, whereas government GDP share is quite a bit higher than average at 12.1 percent. On the plus side, that public employment figure is the lowest in our time series.

Nebraska does well on the most important regulatory policy category, land-use and environmental freedom. However, it has done little to check eminent domain for private gain. On labor policy, it is above average because of a right-to-work law and flexible workers’ compensation funding rules, but it enacted a high minimum wage in 2014 and raised it again by initiative in 2022, with regular increases scheduled out to 2026. We expect Nebraska to slide in the rankings in the next edition because of this change; more importantly, it is likely to harm Nebraska’s competitive advantage on regulatory policy and thus hurt the state economically. Health insurance freedom is tied for best in the nation, with few mandated benefits outside the PPACA essential benefits and with a light touch on managed care. Nebraska does better than average on occupational freedom but was slipping on keeping occupational licensing in check before the COVID-19 pandemic. In 2015, nurse practitioners gained full practice authority, while 2018 saw new sunrise legislation strengthening the prior law. The state has long had one of the best civil liability systems in the country. It has a certificate-of-need law for hospital construction.

Nebraska is only middling on criminal justice policy. Incarceration rates are now average, as they have increased over time, unlike in many other states. Drug arrest rates have been high, but they have come down steadily (with a one-year blip up in 2019). Victimless crime arrests have been moving in the right direction and are now near countrywide averages. The legislature finally enacted a comprehensive asset forfeiture reform in 2016, one of the best in the country. Nebraska is fourth worst on educational freedom. Controls are high, including detailed annual reporting requirements and notifications for homeschoolers, and nonsectarian private schools are subject to mandatory approval and teacher licensing. The state had no private school choice programs by our data cutoff but enacted a small school choice bill in 2023. Gambling freedom is mediocre; even social gaming isn’t allowed. Sports betting appeared to get the green light in 2021, but putting regulations in place around it bogged down the process until 2023. Gun rights were woefully behind what you’d expect in a red state as of our data cutoff. However, they will improve in the next edition because of the passage of a constitutional carry bill in 2023 that also improved state preemption. Some of Nebraska’s lower scores on firearms policies came from special provisions for Omaha. Marijuana policy is also well below average. There is no medical marijuana law. However, Nebraska is solidly above average on alcohol and tobacco freedoms. The nonsmoking majority of Nebraska has foisted on private business fully comprehensive smoking bans, but tobacco taxes are below average. Alcohol taxes are similarly low. Since 2008, the state has had a constitutionally entrenched ban on governmental racial discrimination, such as affirmative action. Fireworks laws were recently liberalized.