The economy is one border battle Wisconsin is winning

It was a near run thing, but, eventually, the Vikings put the Packers to bed at Lambeau Field last Sunday. But depressed cheese heads can find comfort in the results of some other match ups.

As Mark Lisheron writes for our friends at the Badger Institute:

As of 2022 U.S. Census data, the No. 1 destination for Minnesotans was Wisconsin, with 19,307 relocating that year. In that same year, 18,702 Wisconsinites moved to Minnesota, many of them to the Twin Cities, according to the Census data.

IRS data show a similar story, with a twist. Between 2021 and 2022, the federal agency found that 8,211 households (or “tax units” in IRS parlance) moved from Minnesota to Wisconsin, while 7,559 moved from Wisconsin to Minnesota.

Worse yet, the households fleeing east to Wisconsin are much higher income than those going the other way. Minnesota households moving to Wisconsin earned 28% more than Wisconsinites headed to Minnesota. The average household moving from Minnesota to Wisconsin reported an adjusted gross income of $82,001, while Wisconsin households moving to Minnesota averaged $64,061.

Back in 2021, I wrote that Minnesota’s arcane liquor laws were forcing Minneapolis-based Tattersal Distilling to move to Wisconsin. Lisheron notes that:

By the time [Jon Kreidler’s] company made its move, the liquor laws had been changed, but Kreidler’s bet on River Falls had not. The latest wave of taxes is an indignity and will be a burden on the remaining Tattersall operation in Minneapolis, but it’s seen as part of a bigger, more burdensome local and state regulatory structure, Kreidler said.

The ever-increasing minimum wage, mandating healthcare, “sick and safe” time, no tax credit for tips, and increased regulations on running a business are just some of the impediments, Kreidler said.

“It’s tough enough to run a small business in Minnesota, but the added (tax) pressures are becoming too much for a lot of people, and we are going to continue to see more businesses leaving,” Kreidler said. “Political support of labor organizations unionizing small shops is becoming the final straw. It’s getting pretty ugly.”

In my 2020 report “Minnesota’s Border Battles: How state policy affects economies at the margin,” Wisconsin was the state we fared best against. It might be time to look again at those numbers.