Governor Walz proposes budget with record investments and tax checks for Minnesotans.
Governor Tim Walz has proposed a $65 billion state budget blueprint for the next two years which would make significant investments in his key priorities. This includes record funding for K-12 education and additional money for affordable housing, mental health, public safety, and building out electric vehicle charging infrastructure. Walz also proposed a “Walz checks” plan, which would provide one-time payments to taxpayers with incomes of $75,000 or less for single filers, or $150,000 or less for families, with an additional $200 per dependent up to $2,600. This proposal would impact 2.5 million Minnesota households. Additionally, the budget includes tax credits to help families afford the soaring costs of child care and additional credits for low-income Minnesotans in an effort to reduce child poverty.
However, the budget also includes some tax increases. Walz suggests a 1.5% surcharge on capital gains and dividends of individuals, trusts, and estates over $500,000 and 4% for that income if it exceeds $1 million. Additionally, there is a 1/8th of a cent sales tax increase in the seven-country metro for regional transit. These tax increases have drawn criticism from Republican leaders, who argue that the $17.6 billion surplus is a sign the state is overtaxing its residents.
The budget also includes the initial funds needed to get a paid family and medical leave program off the ground in the next few years, and state support for a regulatory framework should lawmakers legalize recreational marijuana. The budget is only a starting point for the legislature, which will ultimately write the state’s spending plan before the session’s end.
The budget proposal has been met with both praise and criticism. Governor Walz believes that it is time to invest in Minnesota and reduce tax burdens on working Minnesotans. However, Republicans have argued that taxes are too high and that the state should consider cutting them. It remains to be seen how the legislature will respond to the Governor’s proposal, and how it will be modified before it is passed.