The decision, which starts on 1/1/2010, means that people who live in one state but work in the other will have to file tax returns in both Minnesota and Wisconsin. The change affects thirteen thousand Minnesotans and nearly 3 times as many Wisconsin residents.
Governor Pawlenty wanted Wisconsin to speed up payments to Minnesota and was banking on the savings as part of his plan to balance the budget on his own. The Minnesota Department of Revenue said in a news release that an agreement could not be reached and so officials decided to end the forty-one year agreement.
Revenue officials say the decision means Minnesota will generate $131 million more in the 2010-2011 budget cycle since more Wisconsin residents work in Minnesota.