Wednesday, February 28, 2007
Small changes in projected revenues and expenditures leave the FY 2008-09 budget outlook almost unchanged according to the forecast released today by Minnesota's Department of Finance.From the official release. That means the DFL will not be able to rely on the forecast to duck the tax cut question. Expect more inflation talk.
The balance projected for the state's general fund at the end of this fiscal year has fallen by $25 million from November's estimate. A very small ($18 million) improvement in FY 2008-09 offsets part of that loss leaving the projected budget balance for FY 2008-09 at $2.163 billion-just $7 million below the level forecast in November. The projected change is an historic low.
UPDATE: Gary calls it "extremely accurate". The StarTribune calls it so-so. I was privy to a conversation about the forecast from those who knew the numbers late last week, and the person said "people will be amazed" how close they were. In essence, the February forecast is a report on how accurate the November forecast is based on up-to-date numbers, and there has been very little over the last three months that has changed economic assumptions ... and I don't think yesterday's stock market sell-off changes that one bit. The only way that might do anything is to increase selling of stocks in the short run, and that might have the perverse short-term effect of accelerating capital gains tax revenues into the next biennium. But I sincerely doubt that will show up. Markets have grown more accustomed to volatility.