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Tom Scheck
St. Paul, Minn.

Dayton to demand $58M payment from Wisconsin

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Gov. Mark Dayton is drafting a letter to Wisconsin's governor demanding payment of $58 million.

Wisconsin owes Minnesota the money because Minnesota ended its tax reciprocity arrangement with the Badger state.

Acting Minnesota Revenue Commissioner Dan Salomone said Wisconsin officials informed him late last year that Wisconsin's budget problems would force them to miss a December 1, 2010 deadline for payment.

"They were intending to make the payment by July 1. Whether they actually do, we'll wait and see I guess," Salomone said. "Hopefully, that will happen, but they were very clear that they would not be able to make the December 1 payment."

Former Gov. Tim Pawlenty ended the tax deal in 2009 and relied on the money from Wisconsin to help balance the state's budget.

Salomone said the 40-year agreement requires Wisconsin to pay interest for any delayed payments. That would be $975,000 if they don't make the payment until July 1.

"The interest is going to be running on a daily basis at $4,600, so I assume we will not settle for anything less than the payment that is owed plus all of that accumulated interest," Salomone said.

An official with the Wisconsin Department of Revenue said her office is trying to determine whether a payment is due and the amount.