Wisconsin State Deficit Grows

This is not surprising in the least. 

State government faces a long-term imbalance between spending commitments and tax collections of almost $1.7 billion, even if the budget-repair bill being debated in the Legislature becomes law, lawmakers were told today.

Bob Lang, director of the Legislative Fiscal Bureau, gave Senate Republicans that estimate of the so-called “structural deficit,” which is the projected shortfall Gov. Jim Doyle and legislators face next year when they must debate and pass the 2009-‘11 budget.

First, however, Doyle and legislators must fix a $652 million shortfall in tax collections in the current budget, which ends in mid-2009. The Senate was scheduled to debate a budget-repair bill today; the Assembly will take up the same bill on Wednesday.

Lang said the $1.7 billion long-term deficit is almost entirely attributable to the slowing economy. Tax collections are only expected to grow by 2%, which is less than half of the average annual growth of 5.5%. Every 1% lag in tax collections means state government collects $130 million less in taxes, Lang said.

The real question is… what will our politicians do?  In a slowing economy where people are losing jobs, foregoing raises, paying for higher fuel costs, paying for higher food costs, trying to keep their homes, and everything else… will our politicians move to scale back the cost of government or increase it? 

Given the budget repair bill, the answer seems pathetically obvious.