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State expects 20,000 new jobs in 2010

MADISON -- Wisconsin's battered economy will add a projected 20,000 jobs this year, and soon-to-be-released state tax collections are also expected to show some strength, state officials said.

MADISON -- Wisconsin's battered economy will add a projected 20,000 jobs this year, and soon-to-be-released state tax collections are also expected to show some strength, state officials said.

But there's a limit to these glimmers of good news for a recession-weary state. The jobs growth forecast in the latest state Department of Revenue report is just over one-tenth of the jobs that have been lost since January 2008, meaning a full recovery in employment isn't expected until early 2013.

In the meantime, experts cautioned that there are still plenty of challenges ahead for the state's economy and the state budget, which supports critical services such as schools and health care.

"It's positive but it's not much of a number from a recovery standpoint," David Ward, president of North Star Economics, said of the jobs figure. "This is as slow as I've seen."

The slow improvement is providing some benefits to the state's struggling budget, said Rep. Mark Pocan (D-Madison), a small-businessman and co-chairman of the Legislature's Joint Finance Committee. Pocan said still unreleased state tax figures for April will show some improvement over prior months in state income tax and sales tax collections.

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"Overall, it's been a very positive month," said Pocan, who believes the state's economy is finally mending.

April's income tax returns make it a key month for state tax collections -- unexpectedly low collections for the same month last year raised the state budget shortfall to more than $6 billion, plunging the Capitol into a crisis. To balance the budget, Democrats who control state government slashed funding for schools and raised taxes on cigarettes and the wealthy.

Now, the state budget is expected to finish its two-year cycle in June 2011 with roughly $30 million in reserves in its main account, according to the nonpartisan Legislative Fiscal Bureau. That's not even enough to run all of state government for a full day, meaning that almost any hit to the budget could trigger a repair bill and call lawmakers back from recess to enact another painful round of budget cuts or tax increases.

Sen. Randy Hopper (R-Fond du Lac) said Democrats are eager to avoid that sort of spectacle as they head toward the fall elections.

Hopper, who owns or operates four radio stations in Wisconsin, said that he's seen some recent improvement in his own businesses, but the entrenched negatives in the economy still far outweigh the emerging positives.

"Everyone still has so much uncertainty about the future," Hopper said. "Unemployment has touched every family in the state. It's your husband or your wife or your brother or sister."

John Koskinen, chief economist at the state Department of Revenue, said he's been encouraged by the pickup in hiring by factories, which have added 6,800 positions since December.

"The one thing that I am most impressed with is that this is an industrial-led recovery," Koskinen said.

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But to underscore the difficulties, the manufacturing sector at the end of last year was down 87,000 jobs since its peak before the recession.

"We are clearly seeing job growth. But we have such a hole that we're going to take some time," Koskinen said.

Todd Berry, president of the Wisconsin Taxpayers Alliance, said: "There's some recovery, but it's not a rocket and it's not going to change the outlook for the next budget."

Berry said the current state budget faces other potential pressures, aside from weak revenues. Those pressures include rising costs of medical coverage for the poor driven in part by the recession and a lawsuit by doctors seeking to overturn the transfer of $200 million from a fund to compensate victims of medical malpractice to balance the 2007-'09 budget. If the Wisconsin Medical Society wins that lawsuit, the state could have to pay back the full amount of the transfer plus interest to the Patients Compensation Fund. The state Supreme Court is expected to rule on the case by the summer.

Copyright (c) 2010, Milwaukee Journal Sentinel/Distributed by McClatchy-Tribune Information Services.

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