UB Economists Provide Revenue Forecasts to State Comptroller

Release Date: April 15, 2008

BUFFALO, N.Y. -- Tax revenue forecasts by University at Buffalo economist Isaac Ehrlich, Ph.D., and researchers in UB's Center of Excellence on Human Capital, Technology Transfer, and Economic Growth and Development may play a major role in future budget negotiations in determining how much the state has to spend.

New York State Comptroller Thomas P. DiNapoli in December contracted with the UB center to develop a tax revenue forecasting model to be used by the comptroller's office as part of the comptroller's expanded role in the revenue estimating process. Ehrlich will direct the project and Yong Yin, Ph.D., assistant professor of economics, and Alejandro Rodriguez, Ph.D., assistant professor of economics, are working with Ehrlich.

The contract covers development and updating of the forecast model to take into account changes in state tax law and the state economy.

"We are pleased to have been selected to produce an independent forecast that could, in principle, play an important role in passage of a state budget each year," said Ehrlich, a SUNY and UB Distinguished Professor of Economics and Chair of the Department of Economics in the UB College of Arts and Sciences.

"Developing this forecast is aligned with the mission of our center, which was created in part to conduct applied research addressing regional economic development issues and challenges facing the New York State economy," added Ehrlich, who also is the Melvin H. Baker Professor of American Enterprise in UB's School of Management.

State Finance Law requires that the executive and legislative branches of government convene a consensus economic and revenue forecasting conference and issue a consensus report on tax, lottery and miscellaneous receipts on or before March 1 each year. If the parties fail to reach consensus, the comptroller is required to issue a revenue forecast by March 5.

"We have been impressed with the work and expertise of the economists at University at Buffalo," DiNapoli said. "They are providing a valuable service to New York State."

Ehrlich and his colleague Zhiqiang Liu, Ph.D., UB associate professor of economics, also are developing a forecasting model for the Western New York economy, in partnership with the U.S. Census Bureau. According to Ehrlich, the model will help researchers and decision makers to better understand the regional economy. "It will identify obstacles and constraints affecting the Western New York economy as well as the assets that can improve the economy," he said.

The center is surveying business owners and executives throughout Western New York to obtain information for the center's first regional economic report, which is anticipated to be released in 2009.

Ehrlich's work in the center is funded by the New York State Office of Science, Technology and Academic Research. The center focuses on the dynamic role of human capital in improving market efficiency and achieving persistent, long-term productivity growth at the firm, industry, region and economy-wide levels. The center also is researching issues and challenges facing corporations in the Western and upstate New York economies. For more information about the center, go to http://www.head.buffalo.edu.

Members of the center's advisory board are Ravi Bansal, CEO, AirSep; Milton Ezrati, partner and senior economic and market strategist, Lord, Abbett & Co; George Gellman, co-chair and CEO, Benchmark Group; Pat Kennedy, Chairman and CEO of Cellport Systems; and Robert Morris, recently retired as chief investment officer, Lord, Abbett & Co.

The center publishes the Journal of Human Capital, the first academic journal devoted to study of the economic effects of people's knowledge, skills, health and values -- attributes that make up human capital. Published quarterly, the journal debuted last year from the University of Chicago Press and is edited by Ehrlich.

The University at Buffalo is a premier research-intensive public university, a flagship institution in the State University of New York system and its largest and most comprehensive campus. UB's more than 28,000 students pursue their academic interests through more than 300 undergraduate, graduate and professional degree programs. Founded in 1846, the University at Buffalo is a member of the Association of American Universities.

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