ERFC explains forecasting method and tradeoffs of the statutory 4.5% assumption
ERFC staff walked through regression‑based forecasting, why ERFC forecasts sometimes outperform a fixed 4.5% outer‑year assumption and recommended conditional approaches (adders or scenario flags) to balance accuracy and conservative planning.
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Dave Wright, executive director at the Economic and Revenue Forecast Council, described the ERC’s forecasting process—national and state economic models feeding revenue regressions and frequent updates vetted by a bipartisan council. He explained that statute allows the council to use either its forecast or a 4.5% per‑year outer‑biennium assumption when preparing an initial outlook.
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