State Ban on Same Sex Marriages Could Hurt Economy
Gay couples and businesses looking to recruit gay employees may see an economic incentive to move out of state.
Back in the 1980s, when I was starting out as a business reporter for the Milwaukee Sentinel, a juicy assignment came my way: examine the impact of Wisconsin’s taxes on the state’s economy. What I found was interesting, and in its own modest way, far-reaching: many well-off older people were leaving Wisconsin for Florida, and not just for its sunnier climes – Florida’s tax rates for both income and estates were much lower than Wisconsin’s. And to make the situation even more interesting, Badger state officials were being aggressive about trying to prove that Snowbirds, those with a second-residence in Florida, were claiming Florida residences as a sham. The tax folks did this by checking such things as where Snowbirds had bank accounts and what churches were listed on their tax forms as recipients of charitable deductions.
As a result, savvy Wisconsin lawyers and accountants were telling clients to sever all traceable ties to the Badger state, even if they were spending 5 months a year here. I spoke to folks who stopped giving to Milwaukee churches they had attended all their lives, closed all their Wisconsin bank accounts, quit civic clubs such as the Rotary and even got fishing licenses as Florida residents although they never cast a line. The Sentinel reprinted the resulting series as a pamphlet and in a few years, Wisconsin’s tax laws and policies were changed to make such legal and accounting advice less urgent.
The ruling leaves unclear many things, including the status for taxes and government benefits of same-sex couples who were legally married in a state such as Massachusetts but who now live in a state that does not recognize such unions, such as Wisconsin. A practical result of the decision is clear for Wisconsin – economically, it puts the state at a huge disadvantage. With the uncertainty around the real-life implications of the ruling in Wisconsin, savvy lawyers and accounts here will have to start echoing the advice they gave rich clients in the ‘80s, telling many gay couples that they would be better off financially living in a place like New Hampshire or Washington State that recognize same-sex marriage, or, if they want to stay in the Midwest, Iowa, which also does. Or, as of next month, Minnesota, which then will. Illinois, too, has a strong movement to legalize same-sex marriage.
The proximity to Wisconsin of Iowa, Minnesota and Illinois makes the Badgerland’s challenge even bigger. When it comes to employer-provided health insurance and Social Security benefits, gay couples will get a better deal in Des Moines, and soon Minneapolis, and perhaps even Chicago, than in Milwaukee or Madison. This is a strong incentive for a business looking to recruit employees nationally to locate outside of Wisconsin, for gay professionals to shun the state, or for a Waukesha gay couple approaching retirement to move. Many conservatives applaud Wisconsin’s marriage laws, just as they deplored the state’s tax laws in the ’80. Many liberals feel the exactly the opposite. But both sets of laws had the same effect — they encouraged people to leave the state or not even settle here. And that hurts us economically and socially.
This column originally aired on WUWM-FM’s “Lake Effect” show.