Dayton urges Wisconsin to pay up

Governor Dayton sent a letter to Wisconsin Governor Scott Walker, a Republican, requesting that the state of Wisconsin pay the $58 million owed to the state of Minnesota.

The state of Wisconsin has not made the final payment in a tax reciprocity settlement that occurred when Republican Governor Tim Pawlenty and Democratic Governor Jim Doyle were in office. Minnesota is set to receive roughly $4,600 a day in interest for every day the payment is not made.

Here’s the letter from Dayton:

Dear Governor Walker:

Our two states cooperate in many important ways to encourage and support the welcomed exchanges between our citizens, businesses, and governments. I am writing you today concerning one of those transactions, which, unfortunately, went seriously awry before either of us became the Governors of our respective states.

Under the individual income tax reciprocity agreement between Minnesota and Wisconsin and under the statutes of both states, Wisconsin was required to reimburse Minnesota annually for its net revenue loss resulting from that reciprocity agreement.

Regrettably, Wisconsin’s failure to fulfill its responsibility for reimbursement compelled my predecessor, Governor Pawlenty, to terminate the agreement, which forces several thousand citizens in both of our states to have to file dual state income tax returns. While I regret this outcome, I concur with Governor Pawlenty’s decision, as the State of Wisconsin at that time owed the State of Minnesota over $58 million.

As calculated and agreed to by the staffs of the Wisconsin and Minnesota Departments of Revenue, a final payment from Wisconsin was due on December 1, 2010. The amount due was $58,697,000, with daily interest of $4,583.99 accruing after December 1st. However, your Revenue Secretary has now informed our Revenue Commissioner that this payment will not be made until some time in the next fiscal year.

I request your assistance and that of your Department of Revenue make the payment due Minnesota in the very near future. I thank you in advance for your help in resolving this important matter.

Sincerely,

Mark Dayton

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