Last month, Governor Tim Walz released his first budget proposal as governor of Minnesota. The governor’s proposal serves as a way to highlight his policy and fiscal priorities and helps shape debate at the capitol as lawmakers get to work on enacting a state budget.
Over the course of last year’s election cycle, Governor Walz campaigned on a message of “One Minnesota”. Looking at his budget proposal, I think it’s safe to say that his “One Minnesota” slogan has become “One EXPENSIVE Minnesota”.
In total, the governor’s budget proposes spending $49.4 billion over the next two years. This is around an 8.5 percent increase in state spending compared to the last budget approved in 2017. Such a large increase in spending is reckless, especially at a time when the state’s economy has been growing.
In addition to a substantial increase in overall spending, Governor Walz’s budget seeks to increase taxes on Minnesotans by more than $3 billion over the next two years alone and an additional $4.7 billion in tax increases in 2022-2023. Keep in mind that these proposed tax increases are coming at a time when the state has a $1 billion budget surplus.
Chief among his tax proposals is his plan to raise Minnesota’s gas tax by 70 percent. Such a large increase would vault our gas tax to fourth highest in the nation. He is also seeking increases to tab fees, the motor vehicle sales tax, and the Metro Area sales tax. In fact, estimates from the Department of Revenue reveal that his transportation related tax and fee increases could cost Minnesotans more than $3.5 billion in 2020-2023.
The gas tax is especially frustrating as it is extremely regressive in nature—leaving low and middle-income families most affected. Not only will it cost more to fill up your car, it will increase the cost of goods and services as well.
Along with the gas tax increase, health care costs rise by nearly a billion dollars over the next two years thanks to the governor’s plan to reinstate the provider tax. The provider tax is levied on most patient services in Minnesota, including things like baby deliveries, chemotherapy treatments, routine doctor visits, emergency room visits, and more.
This proposal comes on the heels of Governor Walz’s pledge to lower health care costs for Minnesotans. It should go without saying, but you can’t lower health care costs by raising health care taxes.
Finally, the governor proposes to raise property taxes by $1 billion over the next ten years by reversing a property tax cut that House Republicans successfully passed during the last biennium.
I am afraid that these onerous tax increases will have a significantly negative impact not only on family budgets, but on the state’s economy as a whole. Minnesotans are already overtaxed, let’s work on ways to reduce their burden.
My focus will remain on helping Minnesotans keep more of their hard-earned money and to work to fund basic priorities like roads and bridges with our state’s budget surplus. I urge Governor Walz to drop his “One Expensive Minnesota” budget proposal and to look for ways to reduce the burden on working Minnesotans and their families.