In recent years, BizTimes has published news stories of dozens of Illinois businesses that have moved across the border into Wisconsin.
Most of those companies have moved into Kenosha County. By any measure, the Badger State appears to be taking Illinois’ lunch money.
However, the relationship between Wisconsin and its western neighbor, Minnesota, appears to be a vastly different story. By virtually every measure, Minnesota is taking Wisconsin’s lunch money, according to a recent study by the LaCrosse Tribune, which lies right at the border.
First, a review. Wisconsin Gov. Scott Walker (a Republican) and Minnesota Gov. Mark Dayton (a Democrat) were both elected to office in 2010. They both inherited large state budget deficits.
Walker, who was facing a 9.2 percent unemployment rate and a $3.6 billion deficit, and the Republican Legislature passed massive spending cuts to public education and enacted the controversial Act 10 to require most public employees to pay more for their health care and pensions. Some tax credits for lower income residents were reduced. Business tax incentives were added, and taxes were cut nearly $2 billion through a combination of income and property tax reductions.
Dayton tackled a $5 billion deficit. Minnesota balanced its budget in part by borrowing against its commitment to education aid. After the 2012 elections, when Democrats took control of the Minnesota Legislature, taxes were raised on the wealthiest Minnesotans, and tobacco taxes were increased.
Walker’s tax plan reduced the highest rate for the wealthiest Wisconsinites from 7.75 to 7.65 percent and brought slight relief to all income levels. Dayton’s plan created a higher rate of 9.850 percent for the top 2 percent of Minnesota’s wealthiest. Dayton’s plan increased tax credits for renters – the opposite of Wisconsin, where those tax credits were cut. Dayton also signed a $508 million tax cut in 2014, of which $232 million was aimed at the middle class and $232 million …Read more...