Why Do Minnesotans Move to South Dakota?

This article was sent to the South Dakota Newspaper Association for publication.

For Immediate Release

Contact Information:

Robert “Bob” L. Smith, 3rd

gopherstatepolitics.blogspot.com

651-222-6888

Letter to the Editor – February 2014

Why Do Minnesotans Move to South Dakota?

Recently, I reviewed a study by the Center of the American Experiment, Minnesotans on the Move to Lower Tax States (American Experiment.org) covering 20 states based on the IRS tax return data that measures movement from state to state, and gives us a relatively accurate picture of population migration.

I wanted to see what the pattern was to our neighboring states based on a normalized out movement using raw data and not netting in & out movement nor considering money transfers. What the rate would be adjusted per 100,000 population using Wisconsin as the norm. That meant going to the Tax Foundation.org web site migration calculator to pull up the Minnesota-Wisconsin data for 2005-2010 to match the above study.

Between the years 2005-2010 Minnesotans moved to South Dakota at almost exactly twice the rate as they moved to Wisconsin, and moved almost exactly three times the rate to South Dakota that they did to Iowa. Once again, double the Wisconsin rate and triple the Iowa rate!

What attracts Minnesotans to South Dakota?  The most obvious reason is no personal income tax, and no estate tax and South Dakota is perceived to be more business friendly. Please refer to The Great Minnesota Exodus Tax Acts of 2013 at gopherstatepolitics.blogspot.com. This raises two questions. First, do some of the Minnesota taxpayers moving to South Dakota take Minnesota businesses and Minnesota jobs with them? Second, a larger issue looms, will the bad personal and anti-growth business taxes passed by the Minnesota 2013 Legislature accelerate movement to other more tax friendly states? And, more so, could these bad laws deter job-creating businesses from starting or expanding in Minnesota?

I’m very concerned. My hope is the Minnesota Legislature will have the acumen to take immediate corrective action to prevent the possibility of a downward-trending pace of potential economic recovery. Maybe we can hear from the South Dakota Chamber and the Governor’s Office of Economic Development with their thoughts, but it sure appears that South Dakota political leadership has already figured this out!

Bob Smith 3^rd

^{St. Paul, Minnesota}