Will the Minnesota-Wisconsin Shared State Services Plan Work?

On Tuesday, Minnesota Republican Governor Tim Pawlenty and Wisconsin Democratic Governor Jim Doyle signed executive orders calling for department heads to identify, by the end of February, “Specific activities, programs, and services … for potential cooperative service arrangements.” The orders were signed to create “Significant improvements to the delivery and cost-effectiveness of state services.”

Areas outlined for potential shared services in a Pawlenty press release include state contract procurement of software, equipment, and institutional food, real estate and state vehicles, prison industries and facilities, call centers, and agricultural, fishery, and nursery operations.

While the budget crises faced by each state is the impetus for the cooperative measures, Governor Pawlenty’s executive order cites the “many similarities” the two states enjoy as the rationale for the partnership. The idea is that Minnesota and Wisconsin share more than simply a border – they also share similar administrative needs and demographic characteristics.

Does the governors’ reasoning hold? Exactly how similar are the Gopher and Badger States?

As it turns out, quite similar, and by many measures.

While the population of Wisconsin is approximately 400,000 more than that of Minnesota (5.601 to 5.198 million), they are ranked back-to-back as 20th and 21st most populous states in the country.

Prison industries and facilities were some of the areas listed as avenues for shared services – the two states also face similar levels of violent crime (both far below the national average). According to the F.B.I.’s Uniform Crime Reports, the two states have nearly identical violent crime rates: 288.7 in Minnesota and 290.9 in Wisconsin (incidents per 100,000 residents, 2007 UCR data).

In the arena of social services, the states are in the top echelon in the country in health insurance coverage. The states are ranked back-to-back in the percentage of residents without health insurance: just 8.8 percent in Minnesota (47th highest) and 8.5 percent in Wisconsin (48th).

The states also consistently boast high levels of civic participation – as demonstrated by their 1-2 ranking in voter turnout in recent presidential elections (including 2008).

On the economic front, both states face multi-billion dollar budget deficits in 2010-2011: approximately $4.8 billion in Minnesota and $5.4 billion in Wisconsin.

Wisconsin has not been hit as hard as of yet in job layoffs – the state’s 5.6 percent seasonally adjusted unemployment rate is just the 34th highest in the country, while Minnesota’s 6.4 percent rate is 19th in the nation (according to November projections by the U.S. Department of Labor’s Bureau of Labor Statistics).

Minnesota, however, has a much higher state gross domestic product: the Gopher State’s $41,353 per capita GDP is 8th in the country, whereas Wisconsin’s $34,890 per capita GDP is ranked just 29th – well below the national average of $38,020, according to the U.S. Department of Commerce’s Bureau of Economic Analysis 2007 data.

The devil, of course, is not only in the details, but also in the administration of any new governmental plan. But although the partnership laid out by Pawlenty and Doyle is not a panacea for the economic ills faced by the states (no projections of savings to the government have been offered by Pawlenty), it appears to be at least a baby step in the right direction on its face – one of many, many cost saving measures the Pawlenty administration is going to need to take in his fight against likely DFL revenue-raising legislation.