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Senate education advisers present inflation outlook that raises adequacy assumptions
Summary
An economist told the Senate Education Committee that two subscription services give differing CPIU forecasts for the FY22–23 biennium—IHS 3.77% and Moody’s 4.93%—producing a simple average of about 4.35% for the period (roughly 2% annualized), which lawmakers said they will factor into adequacy deliberations.
An outside economist told the Senate Education Committee that commonly used inflation measures point to higher costs over the next biennium, a development members said should inform their adequacy work.
Mr. Richard Wilson, who briefed the panel, said the two subscription services the Bureau of Legislative Research uses produced different CPIU (all‑urban CPI) estimates: “The IHS numbers come out right now to 3.77” for the biennium, while “Moody’s [is] considerably higher at 4.93,” he said. Wilson offered a simple average of those two figures—about 4.35 percent for the two‑year period—which annualizes to a little over 2 percent per year for fiscal 2022–23.
Why it matters: the committee is drafting an adequacy report and uses inflation factors when updating matrix line items such as salaries, transportation and operational costs. Several members asked whether the committee should use core CPI (which excludes food and energy) or CPIU (which includes those items) when projecting costs for school budgets; Wilson recommended CPIU for this work because schools regularly incur food and energy costs.
Committee reaction and follow‑up: lawmakers pressed Wilson on the assumptions behind the forecasts, including recovery speed and federal fiscal actions. Senator Elliot and Representative Beck asked for component‑level detail—how much of the higher CPIU is driven by energy or transportation—so they can see the line‑by‑line impact on the matrix. Wilson agreed to update members if projections change and offered to deliver a revision in October ahead of the budget hearing schedule.
Bottom line: the committee has a short window before K–12 budget deadlines to decide how to apply the new inflation guidance. Members asked BLR and staff to model both CPIU and core CPI scenarios and to estimate the fiscal effect of using those indices on the matrix.
