Minnesota's Forecast Process
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. Expenditure projections assume that current law funding levels and policies continue unchanged, adjusted for caseload and enrollment changes authorized in law, as well as formula-driven growth. After determining base expenditures as determined by current law formulas, the expenditure forecast assumes inflationary growth for programs that do not already have allowances for cost growth built into current law formulas.
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.
Sign up to receive Forecasts and Updates by email.
Dr. Anthony Becker, State Economist
Dr. Anthony Becker is a Professor of Economics at St. Olaf College in Northfield, MN, where he has been on the faculty since 1987. At St. Olaf, he has served as the Husby-Johnson Professor of Business and Economics from 2016 to 2019, chair of the Economics Department from 2012 to 2020, and as the chair of numerous faculty committees. He has also worked as a consultant in economic analysis in antitrust and as an expert witness in economic damages. His expertise is in econometrics, particularly in the analysis and forecasting of time-series data. In addition, Dr. Becker has expertise in the field of industrial organization – particularly in the economics of antitrust and regulation – and in the field of public finance.
Economic issues in Latin America are an area of professional research interest of Dr. Becker’s. He has been a visiting professor at the Universidad Nacional in Costa Rica and an affiliate faculty member at the Universidad Nacional del Litoral in Santa Fe, Argentina. He has also led off-campus classes to Argentina exploring that country’s policies towards and production of agricultural commodities for export.
Dr. Becker holds a Ph.D. and a M.A. in economics, both from Duke University, and a B.A. with Honors in Economics from the University of Maryland at College Park. A published author, he is a member of the American Economic Association, American Society of Hispanic Economists, and Western Economic Association International.
For interview requests or other media inquiries, please contact Anthony at Anthony.D.Becker@state.mn.us or (651) 201-8222.
Minnesota Council of Economic Advisers
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 report.
CEA members are appointed by the Commissioner of MMB. Current CEA members include:
- Paul Anton, Anton Economics
- Tony Barrett, College of St. Scholastica (Retired)
- James Campbell, Northern States Power Co. (Retired)
- Elizabeth Davis, University of Minnesota
- Laura Kalambokidis, University of Minnesota (and former Minnesota State Economist)
- Joe Mahon, Federal Reserve Bank of Minneapolis
- Toby Madden, Author and speaker, formerly with the Federal Reserve Bank of Minneapolis
- Thomas Stinson, University of Minnesota (and former Minnesota State Economist)
- Kristine West, St. Catherine University and the Director of the Minnesota Center for Diversity in Economics
