Between Duluth and Superior, thousands of people cross the border for work every day, and income tax reciprocity has helped us build a strong Twin Ports regional economy. One of my top legislative priorities was restoring the income-tax reciprocity provisions the governor axed last fall. Many folks care about this issue, so here's an update.
When Gov. Tim Pawlenty announced his intention to stop reciprocity, I joined a group of legislators from both states, both parties, and all four legislative bodies to discuss the issue and work to halt Gov. Pawlenty's action. All agreed that the first critical step was a new study, assessing reciprocity. This study would give us an idea of exactly who is crossing the border to work, how much they pay in income taxes, and to whom. This study is critically needed because the most recent baseline data we have is now nearly 30 years old. With this study, Minnesota and Wisconsin could renegotiate reciprocity based on accurate information. My bill (HF3370) did this.
My bill made it through committee with support from the commissioner of revenue. My bill also passed the House floor but was eliminated in conference committee. The committee cited "false hope" about the future of reciprocity as the reason for its action. Unfortunately, the false hope here is for thousands of cross-border workers who have operated under reciprocity for more than 40 years, and hope that their state government will not make their lives more difficult in a time of incredible economic stress.
Renewing the study does not promise reciprocity; it simply gives both states accurate data with which to negotiate. This is a necessary first step. Wisconsin passed the reciprocity study and got their part of the deal done. I hope Minnesota can do the same in 2011.
Roger Reinert
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Duluth
The writer represents District 7B in the Minnesota House of Representatives.
