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Government Revenue Forecasting

Understand the impact of economic and policy changes on your tax revenue

As regional economies become increasingly intertwined, events previously thought of as irrelevant or far-flung can now have direct local level impacts. Everything from new tariffs to changing consumer spending to new import patterns can influence local government revenue. For example, weakening economic growth in key Asian economies may weaken export demand for producers in your area. Fluctuating exchange rates and new tariffs may curtail ability for producers to meet demand or influence consumer spending.

Bottom line? Basic models that look only at a local or national geography without incorporating global impacts are insufficient to reliably predicting revenue.

As a strategic partner with award-winning modelling processes and over fifty years of experience, we help our clients quantify how economic and policy changes impact their jurisdictions’ capacity to fund and deliver vital public services. We work closely with city, county, and state governments and legislative officials to help budget and forecast their tax revenues using our custom tax revenue forecasting models or by providing forecasts of key economic drivers.

Sample deliverables

  • Forecasts of tax receipts and key drivers leveraging global inputs
  • Access to underlying driver data
  • Access to models
  • Analytical report describing factors influencing the forecasts
  • Interactive client portal

Methodology highlights

We develop econometric equations and models to forecast sales taxes by sector, personal or individual income taxes on wages and non-wage income, corporate income taxes, excise taxes, and property taxes. Model equations use our proprietary economic and demographic forecasts as inputs. Similar approaches are also deployed to forecast receipts from non-tax fees such as tolls on transportation infrastructure.

To project the local tax revenues, we couple our tax models with our detailed forecasts of the macroeconomic and local economy and include variables such as wage and salary disbursements, personal income, retail sales, consumer expenditures by type including motor vehicles, the unemployment rate, population change, and home prices.

Why IHS Markit?

Linkages
We understand the impact that events abroad can have on local receipts. Our forecast models are fully linked to enable us to quantify changes occurring thousands of miles away on your community.
Expertise
IHS Markit has over 1,200 world class experts and researchers and 1,400 industry analysts. Our Economics & Country Risk team alone has over 200 economists, country risk analysts, and consultants. We have extensive experience working in the revenue forecasting space, serving numerous countries, states, cities and counties.
Concept coverage
We provide more than 150 indicators per state, metro, and county, 360+ US MSAs, over 1,000 indicators for the US and 5 million international historical economic and financial time series. Our global models cover between 250-800 indicators per country, enabling us to work with the indicators that truly drive your results.
Accuracy
IHS Markit is consistently recognized as the most accurate forecaster for the US economy. Inaccurate forecasting costs you money and causes misappropriation. You can’t afford to be wrong.
Industry intelligence
By leveraging expert analysis across IHS Markit, we can assess industry events and trends and provide our clients with a clearer view of how the ripple effects will be felt throughout the United States.

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