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May 15, 2008

Wisconsin's Structural Deficit: $1,700,000,000

Steven Walters:

State government faces a long-term imbalance between spending commitments and tax collections of almost $1.7 billion - even if the budget-repair bill that passed the Senate on Tuesday becomes law.

That figure is $800 million more than last fall, when the budget was adopted.

The Legislative Fiscal Bureau blamed the higher long-term deficit on the sluggish economy, because tax collections are expected to grow by only 2% - less than half the 5.5% annual growth in the past. Every 1% lag in tax collections means state government collects $130 million less in taxes.

Fiscal Bureau Director Bob Lang gave legislators the $1.7 billion estimate of the so-called "structural deficit," which is the projected shortfall Gov. Jim Doyle and legislators face next year when they must pass the 2009-'11 budget.

Posted by Jim Zellmer at May 15, 2008 12:01 AM
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