HF2790 (Legislative Session 94 (2025-2026))
Requirement for state forecast to account for rate of inflation eliminated.
Related bill: SF2675
AI Generated Summary
Purpose
- The bill aims to remove the requirement that the state forecast must account for the rate of inflation. Instead, the forecast would focus on continuing current laws and reasonable growth estimates in the national and state economies and affected populations.
Main provisions
- Forecast parameters (Minnesota Statutes 2024 section 16A.103, subdivision 1a): The forecast must assume the continuation of current laws and reasonable estimates of projected growth in the national and state economies and affected populations.
- Revenue estimates: Revenue must be estimated for all sources provided for in current law.
- Expenditure estimates: Expenditures must be estimated for all obligations imposed by law and those projected to occur as a result of inflation and variables outside the control of the legislature.
- Inflation allowance: Expenditure estimates must not include an allowance for inflation.
Significant changes
- Eliminates the requirement to include a separate inflation allowance in the state forecast.
- Shifts how inflation-related costs are treated in forecasting: inflation effects may be considered only as part of obligations and external variables, not as a distinct inflation factor.
Implications (overall impact)
- Budget forecasting may no longer apply a dedicated inflation factor, which could affect long-term budgeting and planning for rising costs.
- Expenditure projections might still reflect inflation insofar as they relate to legally obligated costs and external variables, but without a separate explicit inflation adjustment.
Significance
- Represents a methodological change in how the state predicts revenues and spending for budgeting and fiscal planning.
Relevant Terms - forecast - forecast parameters - Minnesota Statutes 2024 section 16A.103 subdivision 1a - revenue - expenditures - obligations imposed by law - inflation - rate of inflation - no allowance for inflation - growth in the national and state economies - affected populations - current laws - variables outside the control of the legislature
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 26, 2025 | House | Action | Introduction and first reading, referred to | State Government Finance and Policy |
Citations
[
{
"analysis": {
"added": [],
"removed": [
"inflation allowance in expenditure estimates"
],
"summary": "This bill amends Minnesota Statutes 2024 section 16A.103, subdivision 1a, to revise forecast parameters by removing the inflation allowance from expenditure estimates and by requiring forecasts to assume current laws and reasonable growth in the economy and affected populations.",
"modified": [
"Expenditure estimates must not include an allowance for inflation.",
"Forecast parameters updated to reflect removal of inflation adjustment in expenditures while continuing to assume current laws and reasonable growth in national and state economies and affected populations."
]
},
"citation": "Minnesota Statutes 2024 section 16A.103 subdivision 1a",
"subdivision": "1a"
}
]Progress through the legislative process
In Committee