Minnesota Gov. Tim Walz discusses the Democrats’ proposal for the next state budget, which includes $17.9 billion in new spending, at the Capitol in St. Paul on March 21, 2023. House Speaker Melissa Hortman and Senate President Bobby Joe Champion also outlined the plans, which leaders said included historic spending on schools and tax cuts. (Christopher Magan / Pioneer Press)
Minnesota Democrats plan to add $17.9 billion in new spending to the state’s next biennium, a 35 percent increase from the current $52 billion general fund spending plan, according to a budget framework released Tuesday emerges.
Much of the spending would be ongoing, but there’s also at least $1.5 billion in one-time costs. High-profile items include $3 billion in tax cuts, $2.2 billion in public schools, $1 billion in housing and $1 billion in transportation projects.
“This agreement brings us one step closer to ending child poverty,” said Gov. Tim Walz. “It invests in our families, it invests in the workforce, it invests in infrastructure, roads and bridges. This budget packs a punch.”
Minnesota Republicans were much less enthusiastic, calling the plans a “runaway train that is threatening the livelihoods of Minnesota residents.”
“Massive Democrat spending increases relate to new bureaucracies, include tax hikes on every worker and every company, and siphon earmarked funds to fund a vast expansion of state government,” Senate Minority Leader Mark Johnson, R-East Grand Forks, said. into a statement.
spending targets
The budget bill released by Democratic Farmer Labor Party leaders includes spending targets in about three dozen different areas, but few details on how that money will be spent. Walz said there is room for tax cuts in the budget plans, but so far there is no agreement on what the tax cuts might look like.
House Speaker Melissa Hortman, DFL-Brooklyn Park, and Senate Speaker Bobby Joe Champion, DFL-Minneapolis, said committees would decide how much of the new money to allocate.
The DFL folks don’t need the Republicans to pass their budget if they can hold together their one-seat majority in the Senate and a six-seat advantage in the House of Representatives. They would need Republican votes to borrow money for capital projects — in the form of a bond bill. That requires a supermajority.
Gov. Walz sent a clear message to Republicans who voted against an infrastructure bill in the Senate on March 16. GOP leaders say they will not cast votes to borrow money for state infrastructure without guarantees of sweeping and permanent tax cuts.
“There will be no hostage-taking in negotiations,” said Walz. “There will be no standstill.”
Opinions on the proposals differ
House Minority Leader Lisa Demuth, R-Cold Spring, said Democrat budget plans are too focused on expanding state government.
“Instead of listening to Minnesotans and proposing a responsible budget with meaningful tax breaks, Democrats are going on a spending spree,” Demuth said in a statement. “Brace yourself for the tax hikes – they will be necessary to pay for this partisan wish list.”
Democratic leaders called their budget agreement “historic,” including the largest increase in school funding and the largest tax cut in state history. They also said the plan is structurally balanced, although the new spending they have proposed will slightly exceed the state’s projected budget surplus of $17.5 billion.
“We understand the importance of the budget and we understand that it has to be balanced,” Champion said. “We also understand that our budget must reflect our values.”
Paid family, sick leave, infrastructure
The plan, announced Tuesday, includes a new state benefit in the form of paid family and sick leave, including $668 million in start-up costs, and expanded access to the state health care program. There’s also $240 million to replace lead-water pipes and $500 million in matching funding for federal infrastructure projects, as well as plans to tie the school funding formula to the inflation rate.
Democratic leaders noted that the framework was released earlier than usual, around mid-term, allowing ample time to discuss the budget’s content.
“That puts the legislature back in the hands of all 201 lawmakers,” Hortman said. “You’ve seen too many times in the past that leaders take a very long time to convey budget targets to the chairmen and members of the legislature.”
Now that the legislature has agreed on a budget, the real work begins. The 29 Senate and 20 House Legislative Committees will decide how the vast majority of the nearly $17.9 billion will be spent.
It’s early in the legislature to have an agreed budget framework, but with the DFL trifecta of control it’s easier to reach an agreement. The next state budget is due in May, and the two chambers usually work to pass massive budget bills in the closing days of the session.
“This is about meeting deadlines. It is about cooperation with the allies. It’s about making sure people get involved,” Walz said.
