A Cloudy Crystal Ball: Pandemic Forecasting Challenges Highlight Need for Budget Relief Valves
The Volcker Alliance hosted a conversation with William Glasgall, Volcker Alliance senior director, public finance, and Phil Dean, chief economist and public finance senior research fellow at the Kem C. Gardner Policy Institute at the University of Utah and author of the Issue Paper, A Cloudy Crystal Ball: Pandemic Forecasting Challenges Highlight Need for Budget Relief Valves. The paper is the latest in a series of Alliance reports on state and local budgeting in the COVID Era.
This issue paper focuses on budget forecasting and management lessons learned from the pandemic, drawing on data from all fifty states and interviews with executive or legislative budget officials in Alaska, California, Connecticut, Idaho, Maryland, and Utah—states with varied economic and fiscal profiles. It concludes with recommendations for policy improvements and offers a set of tools help states improve their budget management processes under varying economic scenarios. The paper also provides an appendix that outlines how revenue and expenditure estimates interact with other budget management tools to help state officials manage amid sudden changes such as those posed by the pandemic.
The State and Local Budgeting in the COVID Era Issue Paper series builds on the work of previous research efforts to focus on the impact of the pandemic and resulting recession on states and localities; explore how budgeting policies of states prior to the pandemic have impacted how well they were able to handle the crisis; identify risks and opportunities within states that will contribute to their ability to successfully recover from the financial impacts of COVID-19; and make recommendations for policy improvements that will contribute to the fiscal sustainability of states.