For some historical perspective on the structural deficit numbers being thrown around, here’s a graph made using figures from the latest Legislative Fiscal Bureau memo, the one showing a $1.77 billion shortfall through the end of the 2015-17 biennium, which would be June 30, 2017. For each biennium, beginning with 1997-99, the figure plotted is the total deficit projected at the end of the previous legislative session for the coming two years. In other words, each point depicts the situation faced by the governor in office at that moment – just as Walker faces a steep uphill climb, if reelected and estimates hold. They’ll certainly vary, as he’s noted today, but how much remains to be seen. The LFB initially estimated the 2011-13 shortfall at about $2.5 billion, but later figures swelled beyond $3 billion.
Of the multiple lawmakers who requested updated figures on the structural deficit, it was the memo written to State Sen. Jennifer Shilling (D-La Crosse), a member of the Joint Finance Committee, that circulated the widest. Shilling’s office first submitted her request on Aug. 28, the same day the LFB released its report revealing the 2 percent decline in revenue. Asked why the numbers have changed so dramatically, Shilling said the state’s “staggering deficit can be attributed to the state’s lagging economy and stagnant family wages.”
The Journal Sentinel has the following comment from Walker:
“Remember, the economy is better … Revenues aren’t down because of the economy … They’re down in large part because taxpayers are paying less in this state.”
And that last sentence is masterful in its ambiguity. Obviously, Walker’s $500 million tax cut package, signed in March, played some kind of role in today’s news cycle.
So what happens next?
Back on Sept. 3, the LFB released a long memo detailing the convoluted protocol required by state law when a budget deficit presents itself. Bob Lang, the LFB director, points out that although the governor is compelled under certain circumstances to take action – this is only triggered once the state Department of Administration has officially determined that a shortfall exists, and the DOA secretary (Walker appointee Mike Huebsch) has “discretion” as to when that happens. Once the shortfall has been acknowledged in such a way, the governor is required to either (1) tighten the state’s belt, in the case of smaller deficits or (2) call the state Legislature back into session to figure out what the heck to do, when larger ones arise. The LFB warns that the more immediate shortfall (the one now calculated by the Journal Sentinel as $
396 million) would, technically, meet the bar for the second approach.Meanwhile, as you may have read, there’s a governor’s race going on, and convening the legislature to fix a “broken state budget” seems unlikely before November.
*UPDATE: A previous version of this story used the older figure of $115 million reported by the Journal Sentinel.
