Inflation to be included on both sides of budget, economic forecast

A full and transparent picture of state finances is the goal of a law that erases a budgetary change made two decades ago.

Effective Feb. 22, 2023, a new law requires inflation to be included on both sides of the ledger when Minnesota Management and Budget produces future state budget and economic forecasts.

When the state was projected to face a significant deficit in 2002, a law was enacted to remove inflation only from the expenditure side of the ledger. Minnesota was the only state with such a law.

The law does not specify if what inflationary factor will be used. At least three weeks before a forecast is released, state budget officials must consult with chairs and ranking minority party members of specific committees and legislative fiscal staff to determine the inflation rate and how it is to be included in expenditure estimates.

Rep. Zack Stephenson (DFL-Coon Rapids) and Sen. John Marty (DFL-Roseville) sponsor the law.

HF35*/SF46/CH10

HF0035* / SF0046 / CH10