Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.
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Minnesota's twice-a-year economic forecasts, vital for determining the state's fiscal picture and the basis for budgets, has for too long suffered from a built-in flaw. For the last 20 years, inflation has been prohibited as a formal part of fiscal projections.
If only it were that easy. As Minnesotans have been reminded, inflation pushes up the cost of most everything, either directly or indirectly — including goods and services needed to deliver programs. A budget forecast that fails to account for that basic fact gives an incomplete picture of the state's finances.
The decision to set aside inflation was a pure accounting gimmick, a bad holdover from 2002, the Legislature stripped it from spending projections. Doing so artificially reduced the size of spending deficits projected at the time.
What it couldn't do was change the actual cost of delivering goods and services. It was, as with other devices from that era, a cosmetic fix, designed to create the illusion that government could deliver this year's services at last year's prices. It was mitigated only by the fact that inflation was fairly low at the time.
But that is no longer the case. In the face of inflation not seen in decades, it has become imperative for state government and taxpayers to have honest accounting.
This Star Tribune Editorial Board has for years decried this bit of budgetary hocus-pocus. Finally, this year there appears to be a strong movement by top DFLers, who control the House and Senate, to return Minnesota to truth in budgeting.