Gov. Jim Doyle said the state's economy appears to have started to stabilize, but he added "God help us all" if Wisconsin doesn't make close to a full recovery in the next two years.
Doyle cited slight improvements in sales tax revenue and the move of several large businesses and biotech companies to Wisconsin as he expressed optimism Monday in meetings with the editorial boards of Gannett Central Wisconsin newspapers.
The 2009-11 state budget signed by Doyle in June cut spending by $3 billion by eliminating 1,000 state employees' jobs, imposing across-the-board budget cuts for state agencies and delaying 2 percent pay raises for state employees. Without an improvement in the economy, deeper cuts will be necessary next time, he said.
"If the economy hasn't turned around in the next two years, God help us all," Doyle said.
There are mixed signs on whether the economy is improving -- economic growth has surged, but unemployment also rose, recently.
The gross domestic product, a measurement of the country's economic output, improved by 5.7 percent during the final three months of 2009, the U.S. Department of Commerce reported on Friday. It was the second consecutive advance and the strongest increase since the third quarter of 2003.
Doyle said state economists anticipate modest growth during the second quarter this year, but job growth will lag.
Unemployment rates worsened in December locally, statewide and nationally. Wisconsin's December unemployment rate was 8.3 percent, less than the national rate of 9.7 percent.
December rates in Taylor and Clark counties exceed the nation, at 11.7 and 10.2 percent respectively, according to the Wisconsin Department of Workforce Development. However, Marathon and Wood county's rates are 8.9 and 8.2 percent respectively.
Although he expects employment will improve in the third quarter, Doyle said it could take four years before the state returns to the level of economic activity seen in 2007.