I continue to think about the tax situation in North Dakota right now, particularly trying to understand what the data are trying to tell us. Obviously I want to avoid a situation of torturing the data until they confess, but that should not stop us from slicing and dicing the data to find something meaningful.
We are getting a new forecast this week for tax revenues in North Dakota. Or so we are told. I’ve written about the problems with these forecasts in the past, but there is a further issue here needing discussion. The simple fact of the matter is a lack of good practice in the overall approach, particularly with how forecast results are disseminated.
I did some looking at sales tax revenues. I went back to July of 2009 and stopped the graph at December 2015. I will have a separate post looking at the circumstances after that date with the revision of the forecast and what happened then. These data come from the state OMB Rev-E-News publication released monthly.
The radio discussion today focused on the importance of forecasts and the forecast process in decision-making, particularly budgeting. Most of this related to various aspects of the forecasting and budgeting process at the state level in North Dakota and how it impacts other entities like UND. There was also some appropriate trashing of the forecasters that gave such erroneous predictions and then decide the state is in recession. I discussed some data which I want to make available here. There is more that will be put online as I get it created.
I’ve talked about this on the radio for the last few weeks already, and talked to national media about this too. I thought I would just briefly mention here some of the items people should be looking at with these budget revisions. Here is a link to the announced revisions to the document.