Tuesday, January 16, 2007

Budgeting for inflation = higher spending 

According to a newsletter for the faculty union:
This week Rep. Rukavina and Senator Cohen introduced legislation to require the Governor to include inflation estimate in future budget forecasts, starting with the February 2007. This is an important piece of legislation�the Governor has not recognized inflation adjustments in his budget forecasts and budget recommendations for the last four years. In that time, inflation (the CPI) grew by 11.83%, eroding purchasing power. If inflation is recognized, there really isn�t a budget surplus. This will be a sobering realization for many legislators who had plans to use the surplus for new initiatives. The IFO�s #1 budget priority is to fund inflation at 3.5% for each of the next two years. To do so will cost $140 million.
Here's the bill. The state legislators have already started correcting for inflation with their own pay. A reminder from former state representative Jim Knoblach: "I don't think it's in the state's interest for inflation and spending just be on autopilot."