Minnesota Management & Budget prepares formal forecasts of state revenues and expenditures in November and February each year as required by state law. Forecast information is used by the Governor and Legislature to ensure that enacted budgets remain on track and in balance, and to plan for future budgets. Forecast information is also used by bond rating agencies and other financial analysts to review the state's financial health, and by the media who present information on the state's financial condition to the public.

Forecasts of state revenues begin with information provided by the state's national economic consultant, Global Insight, on national economic trends in output, employment, inflation, income, production levels, etc. The department's economic analysis unit reviews the national forecast with its council of economic advisers to assess whether the Global Insight baseline forecast is an appropriate starting point for the state's revenue projections. The national forecast then is input for an econometric model that generates a projection of economic activity in Minnesota for the coming three years. Those projections of state economic activity in turn drive models that predict current law state revenues.

State expenditures are also forecast twice a year. Caseloads, enrollments, and average costs for certain "entitlement-like" programs including K-12 education finance, property tax aids and credits, health care and family support, and prison populations are forecast by state agency and Minnesota Management & Budget staff. Most non-entitlement programs are forecast to spend at current appropriations levels.

Forecasts of revenues and spending are combined to estimate budgetary balances for current and future bienniums.

The Department also prepares quarterly Economic Updates in January, April, July, and October each year. These updates are not formal forecasts but report on year-to-date revenue collections compared to previous forecasts, and make note of any significant economic or revenue developments that have occurred since the last formal forecast.