Promising Practices

Revenue forecasting cannot be perfect. But states can find ways to improve their accuracy better and manage the volatility of their revenue streams. Interviews with dozens of budget experts uncovered some promising practices from a number of states.

States’ Revenue Estimating: Cracks in the Crystal Ball provides an in-depth review of these practices, including:

• Analyzing errors and refining assumptions
• Making frequent estimates
• Ensuring independence from the political process
• Adding expertise
• Building rainy day funds
• Implementing fiscal devices for limiting reliance on volatile taxes
• Setting spending rules

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