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Senators send tax letter to governors

Lawmakers from Minnesota and Wisconsin asked the states' governors to "immediately resume negotiations" on a potentially doomed income tax reciprocity agreement.

In a joint letter to Minnesota Gov. Tim Pawlenty and Wisconsin Gov. Jim Doyle on Oct. 15, legislators said some 80,000 people who work across state lines will be affected if no agreement is reached.

Without a deal, workers with taxable income from the other state will have to file two tax returns, not one return as allowed under the decades-old agreement.

The Pawlenty administration said last month it would end the agreement because it could not negotiate to receive earlier tax reimbursement payments from Wisconsin. There are more Wisconsin residents working in Minnesota than Minnesotans in Wisconsin.

The lawmakers propose a two-part solution allowing the agreement to continue into 2010 with earlier reimbursement payments. They also suggest updating other parts of the agreement that have been sticking points in past negotiations.

"Working together on this issue will deliver far more long-term benefits than any gains associated with the agreement's termination," they wrote.

Minnesota state Sen. Kathy Saltzman of Woodbury and Wisconsin state Sen. Sheila Harsdorf of River Falls drafted the letter, co-signed by 19 other lawmakers including Rep. Julie Bunn of Lake Elmo and Sen. Katie Sieben of Cottage Grove.