Gov. Walz's $4 billion Budget Unrealistically Large
Last week, Governor Tim Walz proposed an excessive $4 billion budget increase. This unrealistically large budget increase also sets the stage for a protracted budget battle and possible special session if legislators cannot reach agreement on the new budget by May 17th.
Walz’s proposed budget increases already high state spending by $4 billion, bringing the two-year general fund budget of $52.4 billion. To finance this, Walz is proposing over $3 billion in new taxes over the next four years including a new top rate of 10.85%, which would be the third highest for singles earning more than $500,000 and joint filers earning more than $1 million per year. Walz’s proposal also includes a new 11.25% corporate income tax rate, which would be the second highest in the country. This large increase in spending comes at a time when the state has a projected $1.3 billion deficit. That projection will be revisited in late February when the final budget projection is made. If the House votes on this plan, NFIB will put up strong opposition.
Here’s some good news: the Senate majority is strongly opposed to the plan and supports a ‘no new taxes’ approach to Minnesota’s new budget and deficit. The Senate is proposing a 5% spending cut across the board and also tapping the states rainy day fund to resolve the deficit and complete the new budget.