A state audit says taverns and gas stations are cutting into Wisconsin Lottery profits, in part by playing illegal pull-tab games. "There are some private companies out there, that are legally selling pull-tabs and versions of pull-tabs, based upon a court decision several years back," says lottery spokesman Andrew Bohag. "At the same time there are still some others beyond that, that are operating outside of that law. What we were referencing in the audit was particularly those most illegal pull-tabs that don't confirm to any law. But also we were just drawing attention to the fact that there are some "gray market" pull-tabs, as we like to call them, that operate within this loophole, that are legal, but do have an impact on our business."

Based on a comparison with Michigan's similar pull tab games, it's estimated the state is losing out on about $23 million annually. The audit also found county prosecutors reluctant to charge those running illegal games - and the state Justice Department investigating fewer cases. "We understand that they have priorities, just like we do," says Bohag. The audit also recommends a year end performance review of the lottery's adverting agency, something Boghag says the lottery will abide by.

The arrests of gang members in Kenosha is part of a national effort to foreign-born members of violent gangs. All eleven suspects are believed to be Mexican nationals in this country illegally. They include forty-year-old Francisco Cortes-Ruiz, a self-admitted member of the Surenos-13 gang who was deported to Mexico in 1996 after serving a sentence in California's maximim security Pelican Bay prison. He faces up to twenty years in federal prison for re-entering the country. Two more gang members have been turned over to the Kenosha County Sheriff's Department to face outstanding criminal charges. The remaning eight are in federal custody awaiting deportation.

The arrests were part of the ongoing national U.S. Immigration and Customs initiative called "Operation Community Shield." ICE partnered with the Wisconsin Department of Justice, the Drug Enforcement Administration, and local law enforcement in making the arrests this week.

When lawmakers take up the budget next year, they'll be dealing with the worst deficit in state history.

A report given to the Governor Thursday projects the state budget deficit at nearly $5.4 billion, up from around the $3 billion that was forecasted just a few months ago. The Governor says drops in consumer confidence and job losses have resulted in major losses in revenue for the state.

As a result, the Governor has directed state agencies to cut more from their budgets and limited state hiring. He's also calling on the next legislature to pass a hospital assessment right away.

Still, the Governor says it will take more than cuts in state agencies to close the budget hole. Spending cuts across state government will likely be needed. Doyle is also hopeful the federal government will come through with assistance for the 41 states that are currently facing budget shortfalls.

Doyle says the state has to balance the budget and he would like to do so without raising taxes. However, the Governor admits nothing is off the table as he begins crafting his budget.

The only area Doyle says he'd like to avoid any cuts is in education. The Governor says that area needs to be protected in order to make sure Wisconsin is ready to recover from the national economic downturn. Doyle says schools may not get everything they want, but he wants to make sure they have what they need.

The state still faces a $344 million shortfall for the current budget biennium. Doyle says lawmakers may need to come in for a special session early next year to take up another budget repair bill, or take care of it in the next state budget.

The housing industry is in the dumps, but the head of the Wisconsin Realtors Association remains "upbeat."

Home sales in the state were down more than 16-percent from July through September, compared to the same period last year, but Association President Bill Malkasian stills sees good things ahead. He says there are signs that the housing market will recover as Congress and a new President focus on fixing the economy.

Malkasian says the housing market is usually the first area to show signs of an economic downturn, but it's also the first sector to recover when the economy gets back on track.

Malkasian is also hoping economic stimulus packages at the state and federal levels will help to revive the market. 

The state's railroad commissioner backs off on remarks he made, about potential budget cuts. Commissioner Roger Breske said his agency would be reduced to a "dog and pony show," if required to make a ten percent cut as called for by the Doyle administration. "The dog and pony show stuff . . . really, truthfully, I really don't mean that," said Breske.

Breske, who was appointed by the governor earlier this year, now says his agency will do their best. " OCR is a very small office, we only have five full time staff," said Breske. "However, we will do whatever we can to come up with a solution . . . and I look forward to working with DOA (Department of Administration) budget staff to identify as many efficiencies as possible."

The former state Senator also says the state railroads -- and not taxpayer generated revenues -- are footing the bill for the office. "OCR is program revenue, it's not funded by general purpose revenue," Breske said. "The railroads completely support what I and my staff do. We do a lot of work, everything is for public safety. It would put people at a lot of risk if (OCR) people weren't out there inspecting crossings."

Governor Doyle is among US and international leaders who've signed an agreement to help grow "green" economies. The focus is on investment in renewable energies.  Doyle says advocating more oil drilling is not beneficial to Wisconsin because the state has no oil.

Despite a projected multi-billion dollar state budget deficit , Doyle says the state needs to continue to invest in power production from biomass, wind, and solar. The commitment is part of the overall "global climate solutions declaration," which Doyle signed Wednesday at a summit in Los Angeles. The document calls for a reduction in greenhouse gases.

"I'd hate to see us come out of our economic doldrums two years from now and find that we've moved 25 years backward," says the Governor.

Doyle says he'd like to generate 25% of Wisconsin's electricity and 25% of the fuel for our vehicles from renewable sources by the year 2025.

Recently Republican state lawmaker and meterologist Jim Ott took issue with Doyle's attendance.

Contributed by Jason Fischer-WIBA