John Mikesell (Indiana University – SPEA) has a new paper on state revenue forecasting in Public Administration Review with “Often Wrong, Never Uncertain: Lessons from 40 Years of State Revenue Forecasting.” In the paper, Mikesell offers nine “lessons” (albeit I would describe them as “insights”) about state revenue forecasting that are derived from his time on the Indiana Revenue Forecasting Committee. As with all Mikesell papers the footnotes are “must reads.” Here is the abstract:

Experience in state revenue forecasting humbles and educates the public finance scholar and can inform the public administrator. It teaches the limits of econometrics, the importance of disaggregation, the significance of tax administrators, the utility of causal models, the issue of data problems, the need to understand tax structure, the importance of consensus forecasts, the terror of recessions, and the reality of being wrong. In the Indiana consensus system, experience provides greater respect for public servants seeking to make a sustainable fiscal system function and probably contributes to making the revenue forecast binding in the budget process.