I support accounting for inflation on both the revenue and expense sides of a budget forecast. Inflation is real and any fiscally responsible person, much less an elected official, should account for it while budgeting.
We all know Governor Pawlenty vetoed the tax bill because of clauses accounting for inflation in budget forecasts.
State Auditor, Rebecca Otto has now written an opinion that is circulating through papers across the state.
Minnesota has performed very well over the years because we lived by a
guiding principle regardless of which party was in control. That principle was
that we allowed fiscal experts to create a budget forecast that gave a
straightforward, honest picture of our state finances. This gave us as a
baseline snapshot of where we were headed if nothing changed.
Then the governor, the House and the Senate would each craft their own
budgets using that snapshot as the starting point. These budgets reflected their
particular priorities. For example, some areas might get inflationary increases,
while others were cut back or eliminated. The beauty of this system was that it
allowed the fiscal experts to give Minnesotans, lawmakers and the media an
honest assessment of our financial picture.
Exactly, leave it to the forecasting experts to provide our lawmakers with an honest financial picture. Unfortunately, we all know the GOPers like to "cook the books".
Otto responds to claims that this practice, which occurs in 48 other states, puts government on "auto-pilot".
The claim that this puts government on automatic pilot spending is false.
Because elected officials always retain the final say over spending priorities,
no budget is ever automatic. Informed budget decisions must be made every year,
and those decisions should always be based on accurate baseline forecasts.
I cannot comment on the LTE without some criticism though.
I feel it’s my responsibility to weigh in on the debate about whether to
include inflation in the state budget forecast, which the governor cited as the
cause of his veto of the tax bill.
Did this LTE come out before the end of the session? I think it would have been a more powerful statement had this been made while the decision makers were still making the decision, instead of the Monday Morning QB mentality. I agree with Rebecca Otto wholeheartedly.
I just wish this had gotten out earlier!