Purpose

• The bill requires Minnesota budget forecasts to include the budgetary impacts of fraud against state programs.
• It makes changes to how forecast parameters are set and how fraud impacts are analyzed and reported.

Main Provisions

• Forecast parameters (Subd.1a):

  • The forecast must assume the continuation of current laws.
  • It should include reasonable estimates of projected growth in the national and state economies and affected populations.
  • Revenue must be estimated for all sources allowed under current law.
  • Expenditures must be estimated for all legal obligations and those expected due to inflation and variables outside the legislature’s control.
  • Forecasts for state bonding must not include assumptions about future authorizations of state general obligation bonds.
  • The forecast must address the budgetary impacts of fraud (fraud impacts) as required by Subd.1k.

• Forecast variables and consultation (Subd.1b, as amended):

  • When determining inflation, bond debt service, investment income, and other variables used in the expenditure portion of the forecast, the commissioner must consult with the chairs and lead minority members of the Senate Finance Committee and the House Ways and Means Committee, and legislative fiscal staff.
  • This consultation must occur at least three weeks before the forecast is released.
  • The commissioner must inform these same members and staff, no later than two weeks before release, of any changes in these variables from the previous forecast.

• Fraud impact (Subd.1k, new):

  • The forecast must estimate the budgetary impacts of fraud committed against state programs.

Significant Changes to Existing Law

• Adds a new forecast subdivision (Subd.1a) specifying forecast parameters and the requirement to address fraud impacts in the forecast.
• Adds a new forecasting subdivision (Subd.1k) to require explicit estimation of fraud impacts on budget revenues and expenditures.
• Revises Subd.1b to formalize mandatory consultation with specified legislative leaders and staff and to mandate advance notice of changes before the forecast is released.
• Ensures that bond-related forecasts exclude assumptions about future general obligation bond authorizations.

Implementation Notes

• Forecasts must balance standard economic assumptions with explicit consideration of fraud effects on state programs.
• Stakeholder engagement is formalized through scheduled consultations with legislative leadership and fiscal staff before forecast release.

Potential Impacts

• Budget documents will include a clearer view of how fraud could affect state finances.
• Lawmakers will have advanced notice of changes to key forecast variables and fraud estimates, potentially influencing budget decisions and policy responses.

Relevant Terms - fraud, fraud impact, budget forecast, forecast parameters, Minnesota statute, revenue, expenditures, inflation, state bonding, general obligation bonds, debt service, investment income, affected populations, consultation, chairs, lead minority members, senate Finance Committee, Taxes Committee, Ways and Means Committee, legislative fiscal staff, forecast release, forecast variables, budgetary impacts, state programs, forecast 2025 Supplement, Minnesota Statutes 2024/2025 Supplement.