Healthy competition and bragging rights — however temporary — go with “border battles.” Think Badgers and Gophers, Brewers and Twins, Packers and Vikings.
Neither Minnesota nor Wisconsin can take pride, however, in an unhealthy border battle standoff that is approaching a decade in length. We are talking about the lack of income tax reciprocity.
For approximately 40 years, the two states had an agreement that allowed residents living in one state but working in the other to file a single income tax return in their home state. The states exchanged revenue to stay fiscally even.
Eventually, Minnesota always had money coming because the ratio of westbound to eastbound commuters exceeded 3 to 1. Wisconsin fell behind in its payments, so former Gov. Tim Pawlenty killed the program in 2009. Tax reciprocity ended Jan. 1, 2010.
Today, the lack of tax reciprocity hurts more than 60,000 Wisconsin residents and well over 20,000 Minnesotans.
Wisconsin Revenue Secretary Richard Chandler said during a visit last month that the only hope at this time is for a new Minnesota governor; Democrat Mark Dayton, Pawlenty’s successor, hasn’t budged on tax reciprocity, but he also isn’t seeking re-election.
Republican Pawlenty is making a bid to regain his former office.
Regardless of who sits in St. Paul come January 2019, the governor must understand that the lack of reciprocity is hurting the region. This is truly a two-state issue that affects not only 80,000-plus people but their employers as well.
We also must acknowledge that times have changed. While people, businesses and governments were in recovery mode following the September 2008 stock crash and subsequent Great Recession, we are not in the same economic situation today.
Chandler said Wisconsin has offered everything it can at this point to restore the agreement — more frequent payments, financial benchmarks, a clearer agreement. The tax reciprocity system wasn’t perfect, but it worked for people living and working in this community.
The lack of tax reciprocity is nothing to boast about, Gopher and Badger fans.
FROM AN EDITORIAL IN THE RED WING REPUBLICAN EAGLE