Minnesota Management & Budget (MMB) prepares formal forecasts of state revenues and expenditures in November and February each year as required by state law (M.S. 16A.103). Forecast information is used by the Governor and Legislature to ensure that enacted budgets remain on track and in balance, and to plan for future budgets. Forecast information is also used by bond rating agencies and other financial analysts to review the state's financial health, and by the media who present information on the state's financial condition to the public. Click through the tabs below to learn more about Minnesota's forecast process, State Economist, and Council of Economic Advisers.
Twice each year, near the end of November and February, Minnesota Management & Budget (MMB) produces a forecast of Minnesota's state General Fund revenues and expenditures for current and future bienniums. The
Budget & Economic Forecast
reflects current law, and is based on the most recent information about the national and state economic outlook as well as caseload, enrollment, and cost projections.
Economic Analysis (EA) at MMB is responsible for producing the revenue side of the Budget & Economic Forecast. Minnesota's revenue forecast begins with information provided by the state's national economic consultant, IHS Economics (formerly IHS Global Insight), on national economic trends in output, employment, inflation, income, production levels, etc. EA economists review the national economic outlook with Minnesota’s Council of Economic Advisors (CEA) just prior to the beginning of the estimation process in an attempt to evaluate any unforeseen risks.
Once the CEA confirms that IHS Economics baseline forecast represents an appropriate starting point for the state's revenue projections, the national economic outlook is combined with state-level indicators to forecast the Minnesota economy. This is completed using an econometric model of the Minnesota economy developed and maintained by EA. Results from the Minnesota Model produce short-term (30-months), quarterly forecasts of total employment, wages and salaries, and other personal income components in Minnesota that are then used as inputs into other models of Minnesota's tax system to compute projected tax revenues.
The expenditure side of the Budget & Economic Forecast is prepared by state agency and MMB's Budget Division. Entitlement programs, such as K-12 education, property tax aids, health care and family support, and prison populations are forecast based on expected changes in eligibility, enrollment, and average cost. Most non-entitlement programs are forecast to spend at current appropriations levels. No general adjustments for inflation are made to future spending.
In between forecasts, EA also prepares a quarterly
Revenue and Economic Update
in January, April, July and October of each year. These updates report on how actual revenue collections for the current year compare to the previous forecast as well as provide notes on changes in the national and state economic outlook.
See the forecast links for an extended discussion of Minnesota’s economy and projections of future budget obligations. For general data requests or questions, please Contact EA.
Laura Kalambokidis serves as Minnesota’s State Economist, a contract position in Minnesota Management and Budget (MMB).
As State Economist, Dr. Kalambokidis heads a staff of two economists and a model programmer that make up Economic Analysis at MMB, which is responsible for preparing and presenting the state’s twice-yearly Budget & Economic Forecast and quarterly Revenue & Economic Update .
Dr. Kalambokidis’ principal responsibility as Minnesota’s State Economist is to supervise the production of revenue and economic forecasts. Other duties include monitoring the state’s revenue collections, tracking the performance of Minnesota's economy, and informing decision-makers in Minnesota on economic and fiscal issues.
More generally, Dr. Kalambokidis also serves as the state’s chief economics spokesperson. She makes frequent public speaking engagements and responds to questions and interviews with the media on such topics as Minnesota’s economy and tax revenue.
Dr. Kalambokidis has been the Minnesota State Economist since July 2013. She succeeds Dr. Tom Stinson, who held the position for 26 years.
Minnesota's Council of Economic Advisers (CEA) acts as an objective adviser on economic and fiscal matters to both the executive and legislative branches of Minnesota state government.
The CEA's duties include reviewing the assumptions and methodology that Minnesota Management and Budget (MMB) uses to produce economic and revenue forecasts. The CEA may also provide public policy counsel at the request of the Governor, the Legislature, or state government commissioners, and initiate or recommend special studies where economic research and analysis are relevant to evaluation of fiscal policy options.
The CEA meets twice before the preparation of both the November and February
Budget & Economic Forecast
to review the baseline and alternative scenarios of the U.S. macroeconomic forecast and as needed during the summer to review mid-year fiscal matters. Meetings of the CEA are convened by the State Economist. A summary statement from the CEA is included in each
Budget & Economic Forecast
CEA members are appointed by the Commissioner of MMB. Current CEA members include:
Paul Anton, Anton Economics
Barrett, College of St. Scholastica
James Campbell, Northern States Power Co. (Retired)
Dan Laufenberg, Stonebridge Capital Advisors, Laufenberg Economic Quarterly
Richard MacDonald, St. Cloud State University
Toby Madden, Minneapolis Federal Reserve Bank
William Melton, American Express Financial Services (Retired)
Thomas Stinson, University of Minnesota (and former Minnesota State Economist)