What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz

Checking in on Hudson, WI, ostensibly the beneficiary of Minnesota tax policy

Posted by: Adam Belz under Business trends, Economics Updated: June 26, 2013 - 3:19 PM

Warehouse firms have threatened to move to Hudson to escape an expansion of the Minnesota sales tax, echoing a popular theme among tax expansion opponents.

The theme is that Hudson will benefit from higher Minnesota taxes. As one person who emailed me said after I wrote a story about the Dakotas wooing Minnesota workers and businesses, "you might want to focus on the challenge from Wisconsin, which is probably more critical."

My sense was the opposite, that Wisconsin's challenge is weak, considering that unemployment there is higher than in Minnesota and the economy is growing more slowly, in part because Wisconsin's economy isn't terribly well-equipped for the 21st century.

But this reader argued that Wisconsin's fastest-growing counties are across the border from Minnesota, so I scratched up some data comparing growth trends in St. Croix County, WI, which includes Hudson; and Washington County, MN, which includes Stillwater and Woodbury.

In the job and income data I looked at today, there's some evidence of faster job growth east of the border, but Washington has still added 1,147 more jobs since the bottom of the recession in 2009. Also, per capita income is far higher on the Minnesota side of the river.

It seems to me that if you want to talk about a Hudson renaissance at Minnesota's expense, you'll have to prove it.

I acknowledge that there are limitations to this type of straightforward comparison. I'm not claiming this data is the final word on whether businesses are fleeing to Wisconsin. They could be moving to other counties, and there are other measures than jobs and income. Also, the sizes of the two counties are quite different. Washington County on the Minnesota side is bigger, with nearly 74,000 people employed compared to 30,000 in St. Croix County.

That said, here's a snapshot. First, the county on the Minnesota side enjoys a substantial advantage in per capita personal income:

 

Yes, St. Croix County is creating jobs at a faster rate, but remember, Washington County has actually added more jobs in the past five years: 

 

 

Comments welcome.

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