All signs pointed to a rocky term for whichever candidate won the 2002 Wisconsin gubernatorial election.

The financial challenge confronting the state was daunting: Wisconsin faced a $3.2 billion budget deficit, the state’s bond rating was in the tank and the state, like the nation, was in an economic slump. Many said the winner would be doomed to serve only one term due to the perilous budget situation.

Two years later, Democratic Gov. Jim Doyle has reached the midpoint of his first term in office with what most agree is a considerably brighter outlook. Analysts and state political figures differ in opinion, however, over how effective his first two years in the Capitol’s East Wing have been.

For some, any assessment begins and ends with the state’s budget deficit, the 800-pound gorilla Doyle carried into office.

He had to do without the state’s $6 billion premium from the tobacco-industry settlement, which previous Gov. Scott McCallum plugged into a hole in the previous budget. Making the challenge even more difficult, Doyle promised to solve the budget woes without raising taxes, which he said would stifle economic growth.

Doyle kept his promise and cut the state’s deficit in half, to $1.6 billion, for the 2005-07 fiscal biennium. Republicans have praised the governor’s handling of the deficit.

“He has fulfilled the pledge to deal in a serious way with the budget without increasing taxes, which a lot of people doubted was possible,” University of Wisconsin political science professor Dennis Dresang said. “On the whole, there are a lot of positives going for him.”

The nature of Doyle’s cuts, particularly toward higher education, has drawn some scorn, however. He eliminated $250 million of funding from the UW System — the largest any single agency took in the 2003-05 biennial budget — leading to increased tuition in the past few years.

The cut, some say, has placed an unfair burden on the university.

“We’re obviously in a difficult fiscal climate, and students understand that,” Brian Tanner, communications director of the United Council of UW Students, said. “But students took a disproportionate share of the cuts. When you cut $250 million and increase tuition, you’re asking students to pay more for less.”

Tanner said he is “guardedly optimistic” about Doyle’s new higher-education agenda, which includes more state aid and an increase in the amount families can deduct for college expenses on income taxes.

Despite the overall praise for his handling of the deficit, the arduous nature of the budget process has kept Doyle from making big splashes in other areas, Dresang said.

One such casualty may be campaign-finance reform, which stalled in the legislature last session amid relatively little fanfare. Doyle has said the budget problems have prevented him from addressing the issue, though some claim that is merely an excuse to cover for his lack of interest in reform.

“Frankly, as governor, he found raising money to be a lot easier than before, and suddenly campaign-finance reform didn’t seem so important,” Jay Heck, executive director of watchdog group Common Cause in Wisconsin, said. “He hasn’t moved at all on the things he said he would advance.”

In all fairness to Doyle, Dresang said, the governor has had to deal with a Republican-dominated legislature that frequently clashed with Doyle on issues ranging from gay marriage to constitutional caps on state spending. Dresang said the arrangement has served to make neither the legislature nor the governor look very good at times.

Ed Thompson, a Doyle opponent in the 2002 election, said Doyle “has done nothing that impressive” in leading an “incredibly malfunctioning unit” in the Capitol. But Thompson agreed the legislature must take its fair share of the blame for the failure.

In any case, Republicans in the legislature are not going away — the party gained seats in the November election — so Doyle will have to continue to work across the aisle to build upon his achievements thus far.

“The fact is that Doyle’s most notable achievements during his first two years in office were reached by working hand-in-hand with the Republican-controlled legislature on such issues as the Job Creation Act, elimination of the jobs tax, and improving access to venture capital,” Republican Party of Wisconsin Executive Director Rick Wiley said in a written statement.

With two years under his belt, Doyle admits challenges remain, but said Wednesday the state is clearly headed in the right direction.

“From growing our economy to investing in health care and education to restoring fiscal responsibility … Wisconsin is on the move,” the governor said Wednesday in his State of the State address.

Up next: property taxes

With the 2005 State of the State address marking the unofficial start to the 2006 election, Doyle is bracing for a battle with Republicans over property taxes.

Republicans have made addressing rising property-tax levies their No. 1 priority in the new legislative session. With net collection expected to go up six percent, according to a Wisconsin Taxpayers Alliance study, many are critical of Doyle’s veto of a tax-freeze bill last session.

Doyle’s plan to control property taxes includes fully funding shared revenue, increasing aid to education, expanding the homestead credit and school-levy credit and reforming the Expenditure Restraint Program to reward municipalities for holding down property-tax increases.

Doyle praised Milwaukee Mayor Tom Barrett Wednesday for keeping property taxes at low levels despite the lack of a state mandate.

Dane County Executive Kathleen Falk said she is eager to see Doyle’s plan in action.

“The promise to not cut shared revenue is very welcome,” Falk said after Doyle’s State of the State speech.