Wisconsin trails the national economy because the Wisconsin Republican Party's “cuts only” budget sucked billions of dollars of demand out of the state economy.
When workers are laid off or their incomes decline, they reduce their spending. And when consumers stop spending, businesses don't invest. Instead, they lay-off employees and reduce their own spending. A vicious downward cycle unfolds.
This is exactly what has happened in Wisconsin
Walker's budget reduced public employees' disposable incomes ($3,668 a year for the typical public employee making $40,000 a year), raised taxes on low- income people, and slashed state spending which led to lay-offs of teachers and local government employees further reducing spending. He also rejected $830 million in federal high speed rail stimulus funding.
Wisconsin's economy is struggling because of a lack of demand. The Republican Party's response has been to reduce public demand. The result - Wisconsin, which has lost jobs for the last 5 months, is dead last among 50 states in economic performance.