Structural deficits are mismatches of spending and revenues built into a government’s tax system and spending patterns. Structural deficits and structural surpluses, their opposite number, are calculated by
projecting a government’s spending and revenue and comparing the two. These projections are called current service or baseline projections. Not all states make such projections. Not all states having such projections make them public. And not all projections use the same methodology.

Having a structural deficit means a government cannot continue its current spending patterns without raising taxes. The shortfall is often called a budget gap. Conversely, a structural surplus means that current taxes will generate enough revenue to pay for current services with some money left over, sometimes called a fiscal dividend. This money could be used to add new spending, or cut tax rates, or some combination of the two.

Structural deficits and surpluses differ from cyclical deficits and surpluses. The effects of strong economic growth are so positive for most governments that they will show a temporary cyclical surplus in a year of economic boom even if they have a structural deficit. Likewise the impacts of recession are so negative that even states with a structural surplus over the long term may show a deficit in a recession year. Federal and state long-term budget projections do not include predictions of recessions and booms on the theory that they average out in the longrun and their exact timing is impossible to predict.