UPDATED: October 15, 2008 --- 8:30 p.m.
REPORTER: Chris Woodard

For the state of Wisconsin the outlook is now pretty bleak as well.

Today Governor Jim Doyle said the state is likely facing at least a 3-billion dollar budget deficit and to climb out of that hole cuts will be made that will affect everyone.

After holding strong for several months, Wisconsin is now too falling victim to economic struggles.

Doyle says, "There is no doubt it is going to be very, very severe here in the state."

At the heart of our problems are tax dollars. People are spending less and in September alone sales tax collections for the state plummeted 10-percent. Corporate taxes dropped 9-percent.

In the last year Wisconsin also lost 13-thousand jobs causing the state's income tax collection to drop 4 percent in September.

Doyle says, "Unemployment claim activity is actually now reaching levels that we haven't seen since 2003."

Facing what will likely be at least a 3-billion dollar budget deficit, Governor Doyle says they'll look to make spending and job cuts everywhere.

"You can't say anything is off limits. We're going to have to look at everything and it's going to get tougher to do because we have made very deep cuts in state government over the last several years."

Doyle says he wants to protect his priorities, including education, but even those areas may suffer cuts.

The governor says no one really knows where the national economy will bottom out and that will determine how bad things get for Wisconsin. He does say though that 3-billion dollars is probably on the low end at that is something that will be effecting everyone in this state for years to come.

Doyle says he has already told all state agencies they'll need to cut their spending by 10-percent and their plans to do so must be turned in by November 17th.

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Posted Wednesday, October 15, 2008 --- 3:30 p.m.

MADISON, Wis. (AP) -- Gov. Jim Doyle says nothing will be off the table as the state deals with the effects of a weakening economy.

Doyle said Wednesday that job cuts and spending reductions across all of government could be part of the mix. Doyle says he wants to protect his priorities, including education, but he can't promise anything will be off limits.

Doyle says he won't institute a hiring freeze, but any opening will be closely examined before being filled.

Doyle says tax collections were down in August and he expects that trend to continue through the rest of the year.

He says the next two-year budget could face a $3 billion deficit. Doyle will present his two-year plan in February.

Copyright 2008 by The Associated Press. All Rights Reserved.