This post originally appeared at https://www.badgerinstitute.org/minnesotans-fleeing-to-western-wisconsin/

Eau Claire and St. Croix counties booming

Eau Claire — Just down the way from Phoenix Park and the confluence of the Eau Claire and Chippewa rivers, Jon Hanson and his building crew are up at sunrise blocking off Barstow Street so a crane can hoist up part of the latest 100-plus unit multifamily apartment building. Come fall, he says, the place will fill up with newcomers in their late 20s and early 30s, “young couples starting off.”

“The last 10 years have been wild,” says Hanson, field operations manager for Hoeft Builders. “We have another one going up across the river, another apartment building.”

The population of Eau Claire County, now approximately 108,000, has grown almost 10% just since 2010. A little farther west, just across the St. Croix River from Minnesota, St. Croix County has grown 15%.

While there are headwinds in the Eau Claire area — the closure of two local hospitals at the top of the list — the general trajectory shows no sign of stopping.

Between 2022 and 2023 alone, Eau Claire County gained approximately 885 people, the third largest gain in the state behind Dane and Waukesha counties, according to a policy paper written by economist Scott Niederjohn for the Badger Institute. St. Croix County was fifth.

Much of the influx into western Wisconsin is coming from Minnesota. The Badger State in 2021 gained a net of more than 3,000 people and their $243 million in gross income from The Gopher State alone.

Migration is complex and motivation multifaceted. Hanson points out Eau Claire is a “little quieter. … You don’t have the crime. Not too much busy traffic. Decent school system.” Early morning joggers on the trails along the rivers attest to the quality of life.

But there is no doubt Wisconsin has benefited too from the onerous tax rates to the west. Both individual and corporate income tax rates are close to 10% in Minnesota, which has a statewide sales tax of close to 7% and high local sales taxes as well. Overall, Minnesota’s State Business Tax Climate rank is 44^th in the country, according to the Tax Foundation.

Wisconsin has its own high individual and corporate income taxes — both close to 8% at the top — that inhibit growth and investment. But they are significantly lower than Minnesota’s. And Wisconsin’s statewide sales taxes of 5% is among the lowest in the country. The overall State Business Tax Climate ranking for Wisconsin is 24^th.

Eau Claire County and adjacent Chippewa County are not without their challenges. Recent hospital closures reportedly are impacting approximately 1,400 employees and physicians.

Scott Rogers, vice president of government affairs for the Eau Claire Area Chamber of Commerce, says the closure of the two Hospital Sisters Health System hospitals “is on everyone’s mind.” A task force is exploring ways the gap might be filled, and other providers are starting to ramp up some services.

Other challenges are more typical: parking concerns, for example, and workforce-related issues, such as childcare. A relative lack of affordable housing is prompting cities such as Eau Claire and Altoona to take a fresh look at zoning.

But in a state where growth often is anemic, and where many counties are losing population and income, the street closures here are only temporary — a way to make room for the cranes and heavy construction equipment, tangible proof of the allure of an area that is driving the prosperity you don’t often see in many places in Wisconsin.

Hanson, who grew up here and as a kid got his hair cut on the same block where he was working early Thursday morning, is unabashedly positive.

“You always want growth,” he said. “That’s what keeps guys like us in business.”

Mike Nichols is the President of the Badger Institute. Permission to reprint is granted as long as the author and Badger Institute are properly cited.

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