Minnesota House DFL Proposes $5.7 Billion In New Spending

Date: April 19, 2022

Includes $0 for UI, individual, corporate or state business property tax relief

The Minnesota Legislature returns from a one-week break on April 19, with about five weeks to go before the Constitutional deadline to adjourn. The House and Senate still have almost everything to resolve, and what to do with the $9.3 billion surplus remains the biggest question.

For the Minnesota House, one of the first orders of business this week was to adopt a “budget resolution,” which lays out spending limits for different areas of the budget.

This document will guide the House as they pass omnibus supplemental budget bills. These bills represent new or increased spending in addition to the $51.8 billion two-year budget passed in 2021.

The House DFL’s budget resolution proposes $5.7 billion in additional spending and about $1.65 billion in additional tax credits and aids. There is $0 for ongoing reductions to the state personal income tax, corporate income tax or general property tax, as well as $0 for Unemployment Insurance Tax relief.

The spending is allocated among 17 different budget areas:

  • Agriculture: $60 million
  • Capital Investment (Bonding) Debt Service & Cash Projects: $200 million
  • Climate & Energy: $80 million
  • Commerce: $7.8 million
  • Early Childhood: $250 million
  • K-12 Education: $1.15 billion
  • Environment: $240 million
  • Health & Human Services: $700 million
  • Higher Education: $100 million
  • Housing: $230 million
  • Industrial Education & Economic Development: $25 million
  • Judiciary: $140 million
  • Labor & Veterans Affairs: $50 million
  • Public Safety & Criminal Justice Reform: $200 million
  • State Government: $477 million ($400 million for public pensions)
  • Transportation: $225 million
  • Jobs and Workforce: $175 million

As is often the case in the second year of a Legislative cycle, these bills are also loaded with policy provisions – some innocuous, some very detrimental to small businesses.

The Minnesota Senate has not released corresponding budget targets but has passed much smaller supplemental omnibus bills. For example, the Senate State Government bill proposes just $10 million in new spending and their combined Labor, Jobs and Workforce bill contains $250,000 in new spending.

The Senate’s financial focus so far this year has been on continuing the individual health insurance reinsurance program ($300 million), fully repaying the Unemployment Insurance Trust Fund and canceling tax increases on employers ($2.7 billion), permanent reductions to the individual income tax ($2.8 billion) and elimination of the social security income tax ($510 million).

Governor Walz’s supplemental budget includes about $2 billion in one-time “rebate” checks to individuals and married couples under certain income limits, $2.7 billion to fully repay the Unemployment, and about $4.6 billion in new spending and tax credits/aids.

With everyone so far apart, and the Minnesota House still ironing out the details of their proposals, all of this points to a messy end of session.

NFIB will continue working until the end to make sure the massive state budget surplus results in meaningful relief for small business owners

Related Content: Small Business News | Minnesota

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