So there will be a race to keep Scott Walker from waltzing into the governor’s mansion, with Milwaukee Mayor Tom Barrett officially throwing his hat into the ring.

But given the state of the Wisconsin economy, you’ve got to wonder: Who would want the job? Seriously, the next governor is likely facing either 1) major tax hikes or 2) draconian spending cuts.

Neither option will prove popular.

Still, those are the choices facing cash-strapped states that have allowed their budgets to whirl out of control, according to researchers from the Pew Center on the States, funded by the Pew Charitable Trust.

In a stinging report last week titled “Beyond California: States in Fiscal Peril,” Pew listed Wisconsin among the top 10 U.S. states in the worst economic condition. Wisconsin was ranked 9th worst, tied with Illinois.

For Wisconsin, the report points specifically to the loss of 140,000 jobs and one-eighth of its manufacturing workforce in the current recession. The lagging economy has driven down tax collections 11.2 percent, giving government less money to spend when it’s needed the most.

The Pew report also predicts the 2011-13 state budget will start with a structural deficit of $2 billion and the slow economy is not likely to produce tax revenues to fill that gap.

“I’d say the pessimism surrounding the next biennium is pretty widespread,” says professor Andrew Reschovsky of the LaFollette School of Public Affairs at the University of Wisconsin-Madison who participated in the Pew Center analysis.

Factors used in the ranking included: (1) loss of state revenues; (2) the relative size of budget gaps; (3) increasing joblessness; (4) high foreclosure rates; (5) legal obstacles to balanced budgets (6) poor money-management practices.

State officials were quick to challenge the Pew report, however, saying Wisconsin shouldn’t be lumped in with the worst of the worst. The Doyle Administration argues that the unemployment rate here stood at 8.3 percent through September, two percentage points lower than the nation as a whole.

“In no way can Wisconsin be compared to the nation’s most financially troubled states, especially California,” said Michael Morgan, secretary of the Department of Administration, in a news release. “While Wisconsin has been affected, like all states, by the national economic downturn, we have balanced our budget by cutting spending and raising revenues as needed.”

But Susan Urahn, managing director of the Pew Center on the States in Washington, D.C., begs to differ. In written comments to Morgan, she notes that the state has had a negative general fund balance since 2000 and has used short-term fixes — like relying on transportation funds — to cover day-to-day operating expenses.

Actually, the worst budget-balancing gimmick goes back to 2001 when the Legislature and then Gov. Scott McCallum cashed in Wisconsin’s $5.6 billion share of the national settlement with the tobacco companies for $1.3 billion in cash it used to “balance the budget.”

So where does that leave a new governor?

Likely having to decide where to cut and where to tax, says Reschovsky. Like most economists, Reschovsky is not optimistic that the economy will rebound in the next year and says states are going to be looking at a tougher situation going forward.

Instead of just tinkering at the edges, Reshovsky warns that if Wisconsin wants to get serious about reducing its more than $6 billion deficit, it must address such core spending areas as K-12 education, corrections, Medicaid and the UW System — the four largest pieces of state spending.

“You could close all the state parks and wouldn’t even notice the difference in the budget,” he says.

That’s hardly the kind of economic forecast a new governor wants to hear.

Tomo losing money, reputation

It’s not like TomoTherapy needs more bad publicity but now come reports that a medical article touting its cancer treating device was written by a UW researcher who was on the company payroll.

Minesh Mehta, a cancer specialist at the University of Wisconsin School of Medicine and Public Health, had co-authored a medical article in March on TomoTherapy, a radiation therapy system developed by researchers at the university.

But documents obtained by the Milwaukee Journal Sentinel show that Mehta made more than $20,000 in 2008 working as a TomoTherapy consultant and also owned stock options in Tomo, which trades on the NASDAQ stock exchange.

The report on Mehta was part of an ongoing series in the Milwaukee paper about conflicts between UW researchers and their published articles in the medical world. Last month, a study in the New England Journal of Medicine showed orthopedic surgeons routinely failed to disclose financial ties to medical device makers in presentations at the 2008 annual meeting at the American Academy of Orthopedic Surgeons.

Mehta has declined to comment but the story does little to boost the UW’s reputation for unbiased research or the validity of Tomo’s claims.

Tomo released its third quarter earnings last month, showing a loss of $13.9 million for the period ending September 30.

Revenues were also down 10 percent from a year ago to $106.1 million from $118.3 million.

“Although our revenue decreased compared to the first nine months of 2008 and we experienced a net loss, we maintained a working capital balance of $158 million,” the company said in its SEC filing. “Thus, we believe we are able to fund ongoing operations and invest in future product offerings for at least the next 12 months.”

I’ll bet the 200 or so people still working at Tomo and all its local shareholders are hoping the company survives more than just the next 12 months.

But who said the road to a high-tech economy doesn’t have some potholes?

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