Why Is Nebraska Ranked as the Most Fiscally Healthy State?

Mercatus reports:

A big contributing factor to Nebraska’s low long-term liabilities is its relationship with debt. Nebraska does not have any general obligation debt because of a constitutional provision that prohibits the state from incurring any debt in excess of one hundred thousand dollars. As a result, Nebraska has been able to keep debt at five percent of personal income or below since 2010.

Nebraska also makes a habit of putting any excess money from budget surpluses into its rainy day fund. Pew Charitable Trusts’ extensive research on rainy day fund practices commends Nebraska’s rainy day fund for having defined deposit rules but recommends that Nebraska implement more rules that tie deposits and withdrawals to budget volatility and make withdrawal conditions more defined. Despite the improvements that could be made, Nebraska’s rainy day fund has been accumulating reserves.

A better way to put limits on politicians: don't let them issue debt.