Department of Revenue officials projected Friday that Wisconsin's economy and employment will slow down in 2007, largely due to a national downturn in the housing market.

Although total personal income is expected to grow by more than $9 billion this year, a 4.8 percent increase, the figure is slightly less than the 5.1 percent increase in 2006, according to the department's quarterly outlook report released Friday.

Employment is also projected to decline, from 1 percent growth in 2006 to 0.8 percent growth in 2007.

Contributing factors to the slowdown include regular spikes in energy prices, less industrial output, fewer automotive sales and the housing market slump.

"The housing slowdown is contributing to a lot of these," said Audra Brennan, executive assistant for the Department of Revenue, but she added, "I think we'll rebound from that very quickly."

Brennan said 4.8 percent total income growth is less, but still solid. The report forecasts Wisconsin's economy will bounce back to 5.1 percent growth in 2008. Employment will also rebound to 1.2 percent over the following three years.

According to the report, service-based sectors are showing the strongest growth in employment. The education and health services sector grew 3 percent in 2006 and is expected to grow 2.5 percent in the next few years.

The professional and businesses sector also showed strong growth at 2.7 percent in 2006 and is expected to increase by 3.8 percent this year.

Brennan said the report did not take into account any provisions of Gov. Jim Doyle's proposed biennial budget, which could play a large role in Wisconsin's economic outlook.

Driven by several very large jackpots, the Wisconsin Lottery had its second best year in 2006, collecting more than $509 million in sales.

While nearly $300 million went to prize winners, more than $150 million was distributed for state property tax relief, said Jessica Iverson, a spokesperson for the Department of Revenue.

The lottery, by its very nature, is somewhat unpredictable, Iverson said, so it is not out of the ordinary to have a year with high sales.

"The lottery cannot predict how jackpots will be, so sales can be higher," Iverson said.

The multi-state lottery Powerball gave the United States' largest ever draw prize last year — a $365 million jackpot to a group of eight meat-processing workers in Nebraska.

A state lottery report released Friday by the Department of Revenue predicts a revenue dip in fiscal year 2007 to a more-average $489.6 million. The lottery expects to pay $284.4 million in prizes, a 58.08 percent payout.