This morning, what really happens when the Council on Revenues meets.
The Council on Revenues is a meeting of the minds - economists and analysts from government, academe and the private sector - creating or revising a forecast of likely state tax revenues. Governors and lawmakers are constitutionally obliged to base their budgets on what the Council expects. But how do they do it? You probably think they do a lot of decimal-pointed math.
And they do, or some of them do. They have all kinds of measurements of what's happening now, or what happened in the past. They can even compare what's happening now to the last time something was happening that was similar to what's now happening. But ultimately you can't measure the future. All you can do is guess what might affect it.
The dirty little secret of economics is that in the end you're measuring human behavior and while 330 million Americans may collectively behave in measurable ways, you can't predict what one individual will do. So when the Council on Revenues considers lowering its forecast for current fiscal year state tax revenue growth, sooner or later someone says, "Sounds okay to me," which is almost exactly what Ed Case said at the Council on Revenues yesterday when they lowered their forecast for current fiscal year tax revenue growth.
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