Tax increases passed by Illinois lawmakers to resolve the state’s three-year budget stalemate will end up costing Wisconsin about $51 million over the next two years.
A memo released by Wisconsin’s non-partisan Legislative Fiscal Bureau says that’s because of the effect those increases will have on income tax reciprocity agreements between the two states. Under the changes, the state will owe more money to Illinois when those payments are due – while Wisconsin residents who pay taxes in Illinois will also be able to claim larger credits in Wisconsin.
State Republican leaders expressed confidence that some of that money will be regained in the coming years, as people and businesses move across the border into Wisconsin to avoid tax hikes in Illinois. “It took the state of Illinois three years to pass a budget and they still got it wrong,” said Joint Finance Committee co-chair John Nygren (R-Marinette) and Alberta Darling (R-River Hills) in a statement. “We welcome Illinois taxpayers and businesses who are ready to flee the 32% tax hike passed by their state legislature.”
The report comes as Wisconsin lawmakers are trying to resolve the state’s own stalemate, which has caused the state budget to be more than a week overdue.
