Dynamic Scoring of Fiscal Notes y g An attempt to predict - - PowerPoint PPT Presentation

DynamicScoringofFiscalNotes y g

Anattempttopredicttheimpactof Anattempttopredicttheimpactof fi l li h b f i fi l li h b f i fiscalpolicychangesbyforecasting fiscalpolicychangesbyforecasting theeconomicreactionstothepolicy theeconomicreactionstothepolicy h change change

TheCurrentDebate

St ti i d t t k i t t ll St ti i d t t k i t t ll

• Staticscoringdoesnottakeintoaccountall

Staticscoringdoesnottakeintoaccountall fiscalimpactsgeneratedbytaxchanges fiscalimpactsgeneratedbytaxchanges tax tax t l i t l i cutsmayalsoincreaserevenues cutsmayalsoincreaserevenues

• Dynamicscoringposesanumberofproblems

Dynamicscoringposesanumberofproblems Cannotaccuratelymeasurefuturechanges, Cannotaccuratelymeasurefuturechanges, impactisrelativelysmall,etc. impactisrelativelysmall,etc.

Philosophies,PoliticsandProjections p , j

One’s view of the usefulness or value of dynamic scoring can One’s view of the usefulness or value of dynamic scoring can One’sviewoftheusefulnessorvalueofdynamicscoringcan One’sviewoftheusefulnessorvalueofdynamicscoringcan bedirectlytiedtoone’spoliticalorphilosophicalleanings bedirectlytiedtoone’spoliticalorphilosophicalleanings

• Conservativeversusliberaltendencies

Conservativeversusliberaltendencies M di thi k t k d d i i t ti M di thi k t k d d i i t ti

• Media,thinktanksandadministrations

Media,thinktanksandadministrations

• JointSelectCommitteeonDeficitReduction

JointSelectCommitteeonDeficitReduction

Issues

• Assumptions
• Assumptions
• Consistency
• Comparability
• Controls
• Guidelines

Questions Q

• Will it impact legislative desire to enact or

Willitimpactlegislativedesiretoenactor rejectaparticularpolicychange?

• Can future impact be predicted and
• Canfutureimpactbepredictedand

defined?

CurrentUseinUtah

Raisingthecigarettetax:

• Static measure of the increase

Staticmeasureoftheincrease

• Costperpacktimesthecurrentvolumeofsales
• Dynamicmeasure

y

• Reductioninsalesvolumeduetoincreaseinprice

ChallengesofStaticScoring g g

• Timing

Timing

• Complexity/MultipleAgencies

i l i

• DisputeResolution
• DefinedGuidelines
• Followup
• Historical Basis or Trend

HistoricalBasisorTrend

ApplyingChallengestoDynamicScoring pp y g g y g

• Timing

Timing

• Complexity/MultipleAgencies

i l i

• DisputeResolution
• DefinedGuidelines
• Followup
• Historical Basis or Trend

HistoricalBasisorTrend

CanaBalanceBeAchieved?

Static Dynamic Static Scoring Dynamic Scoring C th f d i i ( i il t h t i d Cantheuseofdynamicscoring(similartowhatisdonenow withstaticscoring)beeffectivelyusedtopredictwithany accuracythefutureeconomicimpactofachangetorevenue

• rcosts?

CanaBalanceBeAchieved?

Static Dynamic Static Scoring Dynamic Scoring Li it d l ti l ll i i t b Limiteduseonrelativelysmalleconomicimpactsmaybe beneficialifusinggenerallyagreeduponassumptions

WhatIsNeeded?

• Moreresearch
• Independentgrouptooversee

p g p

• Standardsetofguidelines

Themorethatassumptionsorbiasenterthe equations,themoreunreliablearetheresults q ,

Remember

Thevaluewegainfrom dynamicscoringoffiscal y g noteswillbeindirect proportiontotheeffortand p p timeweputintoit