Nebraska is in a positive state of mind thanks to a diversified economy and controlled spending, Gov. Dave Heineman told CNBC Wednesday.
Unlike Minnesota, nearly a week into a government shutdown because of an impasse over its budget, the Cornhusker State is doing very well, he said. Heineman noted that ConAgra Foods is based in Nebraska and the state is the second-largest producer of ethanol in the U.S.
"Because of commodities prices and alternative energy, the cattle markets, all of it has come together very well for us," he said. "Think about the fact we’re gonna feed millions of more people probably on less land in the future. I think agriculture’s future still looks bright when you look at the big picture."
Agriculture and ethanol producers could face cuts in subsidies as Congress looks for some way to cut the federal deficit and raise the debt ceiling before August. Heineman said people in his state understand that — up to a point.
"We know in Nebraska if the federal government is going to get its books in order, all of us are going to have to take some reductions in federal spending," he said. "We’re willing to do that. Just don’t try to balance the federal budget on the back of our farm economy."
For instance, don’t dramatically end ethanol subsidies in one year but phase the cuts in over three to five years, he said.
Heineman said Nebraska, which ranked 10th on CNBC's 2011 Top States for Business list, has added to its economy through encouraging job creation in the transportation, manufacturing, technology and telecommunications sectors. The state unemployment rate is 4.1 percent, about half the current national rate.
"If you talked to any farmer or any Nebraskan we would tell you the federal government needs to balance their budget. They need to lead by example and do what we did in Nebraska," he said.
Most important, Heineman said, "Don’t spend money you don’t have. That keeps you out of trouble every single day."