The politics of state revenue forecasting in Ohio, 1984-1987: A case study and research implications

This paper draws on the authors’ experience in preparing revenue estimates to examine the relationship between forecasting and the political process in the State of Ohio. Data comparing actual revenues with forecasts for the period July 1, 1983 through June 30, 1987 are examined along with the corresponding political environment. This comparison suggests that forecast accuracy can be achieved even in a highly partisan political environment, provided that the officials involved perceive the political advantages of submitting unbiased forecasts. Among the techniques that may assist in assuring more accurate forecasts are: judicious use of outside experts, cooperating with a professional forecast agency in the legislative branch, and a mechanism to assure systematic monitoring and revision of previous forecasts. The implications of these findings for practitioners and for future research are discussed.