Economic Development

The Minnesota-Wisconsin Partnership

The 'Minnesconsin' adventure may not always be easy, but the two states have found that collaboration is cost-effective.
by | August 2010
 

Wisconsin and Minnesota, though rivals on the football field, look past their differences if it means their citizens can benefit. Both states have long offered in-state tuition for university students coming across the border, for example.

Then last year, in the midst of the economic crisis, Minnesota Gov. Tim Pawlenty and Wisconsin Gov. Jim Doyle took their states' collaboration to the next level -- they asked state agencies to work across the border with their counterparts to find ways to save money in purchasing and delivering services. In March 2009, the governors released the Wisconsin Minnesota Collaboration Report, a 130-page document of recommendations for areas where the two states could pool resources to save money. Eighty areas of potential savings were highlighted in the report. "We're not proposing to merge the Vikings and the Packers, but we are going to seek out every area where we can save money and improve services by working together across state lines. This is an historic agreement between our two states that can serve as a model for the rest of the country," Pawlenty said in early 2009. Doyle echoed his neighbor. "This marks the start of an important effort to cut government spending while protecting essential services during a tough economic time for our country," he said. "We're committed to taking action now and building on these efforts in the future."

Sharing services is nothing new -- in the winter, many Midwest communities join together to bulk purchase road salt, which is where the Minnesota-Wisconsin collaboration began. What's unique about the two states, however, is the partnership's size and the multitude of programs under consideration. The Gopher and Badger states are looking to find efficiencies and save money on everything from sharing amusement ride inspectors to buying ammunition and tires. The task has not been easy, but in the year and a half since the report's release, Minnesota and Wisconsin have shared resources, consolidated services, bartered and even joined forces on contracts for package delivery, software and institutional food.

In fact, one of the biggest collaborations to date involves food. Minnesota shared one of its Department of Corrections' best practices with Wisconsin -- standardizing menus across all state institutions. In both states, tacos are served every Tuesday, which saves 10 cents per meal in Wisconsin, adding up to $2 million per year for the Badger State. Another corrections saving for both states comes from milk -- a Wisconsin corrections facility that runs a farm is increasing production, allowing Minnesota to purchase milk at a savings of $250,000 annually, while Wisconsin sees an increase in revenue.

Both states will see more savings through the Cooperative Purchasing Venture program, which now allows most Wisconsin state and local government agencies to purchase various products on a Minnesota contract. To the vendor, it seems as though an internal Minnesota agency is making the purchase, rather than another state. Minnesota currently has 900 contracts Wisconsin can purchase through, and Wisconsin has worked to make its boilerplate solicitations easier for Minnesota to join as well.

Merging IT systems and sharing data is another key area of collaboration. Wisconsin, which already partners with Illinois on mutual access to child-support cases, now will also work with Minnesota to ensure on-time payments for the 10,000 cross-state cases. And for those working on shared IT services, increasing late income tax collection is a top priority.

According to Brenda Willard, assistant director of Minnesota's Materials Management Division, no proposal for collaboration was "off the table." The increased communication between state agency counterparts -- which now involves biweekly telephone calls -- is leading to a culture change in both state governments. "Information sharing that began as a formal directive evolved to an open dialog and generated excitement and a new openness to look at operations differently," she wrote. "'We've always done it that way' became 'How do they handle this in Minnesota/Wisconsin?'" Now, finding more efficient ways to do business and serve citizens has become a major part of each agency's culture.

As noted in an October 2009 Governing article, the Minnesota-Wisconsin collaboration, dubbed "Minnesconsin" by local media outlets, has not always played out smoothly. The 1967 Income Tax Reciprocity agreement, under which residents of one state who worked in the other could file a single income tax return, was terminated in January. The deal was cancelled because the states couldn't reach agreement on a modified timetable for the Badger State's payment to Minnesota-Wisconsin didn't pay until about 17 months after taxes were collected, causing a severely unbalanced budget in the Gopher State.

Another area that didn't quite work was trading fish. One state needed frylings, the tiniest walleye fish, to stock its lakes; the other needed the longer walleye fingerlings for its fishing lakes. But when the two began talking, they learned it would be more difficult than originally expected to swap the young walleye. To move the fish across the border, their health would need to be tested to ensure they weren't carrying a deadly virus. State officials also determined genetic testing and yearly water testing would be necessary to make certain the program was leading to successful restocking. As proposed, the program was too laborious and time consuming to continue. The two states will try it again next year. "Early on it's hard because you have to iron out a lot of things" Willard says. "I think it's going really well now. We've had some really good successes."

In truth, the current savings may be little more than a drop in the bucket compared to each state's budget gap -- Minnesota at nearly $3 billion and Wisconsin at more than $2 billion. But each state estimates that it will save millions per year through the program once it is fully operational, and both governors say some of the initiatives and shared programs will produce greater long-term savings than short-term gains.

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