House taxes chair praises Pawlenty’s ultimatum to Wisconsin on tax reciprocity payments

In a rare moment of bipartisan sentiment following yesterday’s confrontational Legislative Advisory Commission meeting, House Taxes Committee chair Ann Lenczewski (DFL-Bloomington) applauded Gov. Tim Pawlenty’s letter to Wisconsin Gov. Jim Doyle demanding that income tax reciprocity payments from Wisconsin residents who work in Minnesota be remitted sooner. (The June 16 letter went on to threaten Wisconsin with an end to the reciprocity agreement–which, for the 80,000 people who cross state lines to go to work, would mean filing an additional tax return every year.)

Lenczewski noted the long lag in those payments at present (around 17 months) and said she agreed with Pawlenty that Minnesota can’t afford it anymore. "It would be a drag for all the Minnesota and Wisconsin residents who would have to file returns in both states" if the agreement was terminated, she told PIM, "but the whole arrangement does need to be changed."

So far there has been no official response from Wisconsin, and repeated calls by PIM to the governor’s office and to the offices of key state legislators in the past week have gone unreturned. And yesterday MPR’s Tim Pugmire reported that he had the same problem.

That doesn’t augur well for an agreement on early payment. Neither does the state’s ailing budget, which wrapped up last week after legislators and Doyle negotiated a package to close a projected $6.6 billion deficit.