November budget forecast to be released today; a word about inflation

Today, State fiscal analysts will release the annual November budget forecast. While it's the February forecast that serves as the official basis for the budget, the November forecast gives us a good first estimate, and will allow the Governor to begin drafting his budget proposal. While I can't say for sure what the forecast will look like, it seems like a safe bet that it will show yet another of the deficits that have plagued us since taxes were shortsightedly cut under Jesse Ventura. Worse, the true deficit will be higher than the forecast shows.

The budget forecast will understate the deficit because it does not count for inflation. I know, that seems insane, doesn't it? To produce an honest and fair budget, it's important that we understand the true cost of providing the same level of services we did in the last biennium. And in a state where the budget will approach $40 billion, even 1 percent inflation would mean the budget must increase by $400 million. Regardless of the measure you use, inflation was greater than that in 2012.

So why doesn't the forecast account for inflation? You can thank our previous Governor, Tim Pawlenty, who vetoed a measure that would have fixed the mistake. Pawlenty claimed that accounting for inflation would create "autopilot growth." But the fact is, if we decide we want to keep a service like education or state-provided health care at the same level, it has to grow each year to cover inflation; anything that fails to keep pace with inflation means a reduction in services.

This is one of those seemingly small, niggling things that actually make a big difference in how we governor ourselves. With full control of the state's policymaking apparatus, it's important that DFLers fix this oversight this year.

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