For commuters’ sake, governors should seal the dealA repeal of the tax reciprocity deal could mean more cross-border workers having to file tax returns in both states and paying more in taxes.
They stood side by side on the sparkling St. Croix River in Hudson, governor buddies Jim Doyle from Wisconsin and Tim Pawlenty from Minnesota.
They’ve met before to stress a spirit of cooperation between their states. One such area includes a mutual goal to clean the St. Croix, especially as it pertains to runoff from construction sites and farms.
Doyle and Pawlenty have also directed their cabinet agencies to work together, which could save both states money.
We applaud these efforts, yet note that thousands of Hudson and western Wisconsin commuters to Minnesota face headaches and higher tax bills unless these chummy governors can compromise on their differences.
Both are trying to plug multi-billion dollar gaps in their respective state budgets.
Toward that end, Pawlenty wants some of Wisconsin’s cash to help with erasing Minnesota’s deficit. The two states have a reciprocity deal that allows residents from one state who work in the other to pay income taxes in their home state.
Since there are more than twice as many Wisconsinites working in Minnesota as Minnesotans working in Wisconsin, Wisconsin makes up that difference with annual payments to the Gopher state of more than $100 million.
Pawlenty wants to fast track those payments. But Doyle says Wisconsin pays on time and with interest, according to terms established by the states 40 years ago. Doyle adds that the high interest rate Wisconsin pays – 7 top 8 percent -- benefits Minnesota in the long run.
A repeal of the tax reciprocity deal could mean more cross-border workers having to file tax returns in both states and paying more in taxes.
In the scheme of things, a roughly $100-million scuffle in the midst of billions of dollars in red ink seems like small potatoes. In Minnesota, Pawlenty’s been criticized for delaying payments to school districts – another accounting gimmick, it would seem -- to balance the books in his state.
By meeting and reaching out to one another Pawlenty, a Republican, and Doyle, a Democrat, have done what the two major parties in Washington have failed to do. Wisconsin and Minnesota citizens should applaud their bipartisan spirit.
Now, let’s see if the goodwill can extinguish the tax debate before it escalates and frustrates thousands of constituents along both borders. Please, governors, roll up your sleeves and begin.