Budget Process and Reforms

Budget Reforms in the 2007 Legislative Session: Progress Lost to a Veto, October 2007
As part of a Campaign for a Better Budget Process, the Minnesota Budget Project recommends the state rebuild its budget reserve and properly account for inflation in its economic forecasts. The Legislature included both provisions in its 2007 omnibus tax bill, but Governor Pawlenty vetoed the legislation.

Build the State's Budget Reserves to a Responsible Level, July 2007
The Minnesota Budget Project recommends incrementally building the state’s budget reserves to a responsible level by making it a state priority to build stronger reserves during good economic times. Minnesota’s Council of Economic Advisors has long recommended that the state maintain reserves equal to five percent of the state’s general fund biennial budget.

Ensure the State's Economic Forecasts Take Inflation Into AccountJuly 2007
Minnesota's economic forecasts are essential policymaking tools, but have a serious flaw due to legislation passed in 2002. While they adjust future revenue for inflation (assuming growth in income, sales and other taxes), they do not adjust future spending for inflation. The state needs to include inflation in both parts of the forecast to help decisionmakers understand whether fiscal decisions are sustainable.

 

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