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Duluth native, now Wisconsin lawmaker, tries to lure businesses from Minnesota

ST. PAUL -- A Duluth native now serving in the Wisconsin Legislature says Minnesota Gov. Mark Dayton's budget proposal is fantastic. For the Badger State. Rep. Erik Severson, R-Osceola, sent an open letter to Minnesota businesses Tuesday urging t...

Rep. Erik Severson
Severson sent an open letter to Minnesota businesses Tuesday, Feb. 5, 2013, urging them to relocate across the border in response to Dayton's recent budget proposal.

ST. PAUL -- A Duluth native now serving in the Wisconsin Legislature says Minnesota Gov. Mark Dayton's budget proposal is fantastic.

For the Badger State.

Rep. Erik Severson, R-Osceola, sent an open letter to Minnesota businesses Tuesday urging them to relocate across the border in response to Dayton's recent budget proposal.

"[Dayton] does not seem to understand that high taxes drive businesses out -- out of business and out of his state," Severson said in the letter. "Fortunately, your neighbors to the east are ready to welcome your business with open arms and low taxes."

Severson was born in Duluth, graduated from Esko High School in 1992 and earned a bachelor's degree from the University of Minnesota Duluth, according to his legislative biography. He moved to Osceola, on the St. Croix River, in 2005 when he took a job there as an emergency room doctor. He was elected to the Wisconsin Assembly in 2010.

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Severson said his office sent the letter to hundreds of Minnesota businesses close to the border, including 3M, Best Buy and UnitedHealth Group, in an effort to make them "stop and think if this is where you want to be."

Dayton's plan would raise $2.1 billion in additional tax revenue over the next two years. Key parts of it include lowering the state sales tax rate from 6.875 percent to 5.5 percent, but expanding it to more items and services.

It's the tax on services that has stirred up the Minnesota business community.

Dayton's office responded to Severson's letter by saying job growth is not dictated by taxes, and Severson should worry about his own state.

"All indicators show that there is not the direct correlation between tax levels and job growth; in fact, Minnesota's economy has fared far better than Wisconsin's over the last couple of years," said a statement from the Minnesota governor's office.

Laura Bordelon, senior vice president for advocacy at the Minnesota Chamber of Commerce, called Severson's letter "a clever move but probably premature."

"The governor's proposal is the just the very beginning point of the legislative debate on taxes and spending," Bordelon said. "We have months left in the legislative session. They haven't even really started debating some of the proposals yet."

However, she said, some businesses were expressing concern over some of Dayton's tax proposals.

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Severson said that despite the fact that Dayton's plan, which he called "fantastic" for Wisconsin, still is just a proposal, Minnesota businesses should take it seriously.

"This is the atmosphere you're living in," he said. "Sure, some of these things can get taken out (of the budget proposal), but then what happens after that? It's just going to continue going down this road."

In the letter, Severson highlights Wisconsin turning its $3.6 billion deficit into a surplus while "holding the line on taxes." Those efforts, he said, have turned Wisconsin into "a haven for private sector growth."

While a recent forecast for the state's economy does show improved growth for 2013, Wisconsin is still lagging behind Minnesota in a number of economic factors.

The Federal Reserve Bank of Minneapolis projects:

  • Minnesota's job growth at 2.2 percent compared with Wisconsin's 1.3 percent.
  • Minnesota's personal income to grow 5 percent compared with 4 percent in Wisconsin.
  • Unemployment in Minnesota to drop to 4.7 percent by the fourth quarter compared with 5.6 percent in Wisconsin. "We would suggest Rep. Severson focus on the problems facing Wisconsin," said Dayton's office, "and we will continue to focus on the challenges facing Minnesota."

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