What is in Gov. Tim Walz's first budget proposal?

It provides a huge boost to education funding,
Author:
Publish date:

Tim Walz has revealed his first budget proposal as the Governor of Minnesota, with education taking center stage.

The governor has proposed a $49.5 billion funding plan for the next two years, which represents a significant increase of 8 percent on the current $46 billion two-year budget.

A former teacher himself, Gov. Walz is proposing a 3 percent increase in the general education basic formula in each of the next two years, providing an extra $523 million in spending in the coming biennium.

Meanwhile, he's also proposed funding improvements in transport infrastructure by increasing Minnesota's gas tax by 20 cents over the next two years, which is almost certain to be opposed by the Republican-led Senate.

Gov. Walz wants to increase the working tax credit to help lower- and middle-income families pay for this gas tax hike.

Education is one of three main focuses in Walz's budget, the others being health care and "community prosperity."

"Minnesotans want to bring down the cost of health care, provide a quality education to their children and grandchildren, and ensure communities across the state are prospering," he said. "The budget I am unveiling today will make significant strides in achieving these priorities."

"This budget reflects the morals of the people of Minnesota," he added. "This is the budget Minnesotans voted for by historic margins. I am proud to unveil a budget that makes smart choices to invest in the future while maintaining a fair and balanced budget."

Here's a look at some of the key points of Walz's budget proposal – which you can read in detail here.

Education

"Every student in Minnesota deserves the opportunity to learn in the best schools in the world," Walz said, before noting that around Minnesota, the quality of schools varies dependent on a child's race and zipcode.

Walz is planning to invest an additional $733 million in pre-K to Grade 12 education over the next two years, including the following measures:

Increasing the spending formula: Walz is proposing to increase the basic education spending formula by 3 percent in the next two years, a total investment of $523 million. 

Pre-k funding: $59 million is proposed to continue the funding for 140 free pre-kindergarten programs across the state, benefiting 4,000 children.

Community schools: Walz's education plan also includes restoring funding to full-service community schools across the state, providing $8 million over the next four years for the schools that provide not only education for children, but also primary health and dental care, as well as job training and classes for adults.

Higher education: There will be an increase of $158 million in funding for Minnesota's higher education system, including $62 million earmarked for student grants.

You can find more about his education plans here.

Transportation

Gov. Walz says there's a $6 billion gap between what Minnesota needs to spend on transportation over the next 10 years and the available revenue.

Gas tax: He plans to help cover this gap in road and bridge funding firstly by increasing Minnesota's gas taxes by 20 cents, which will be phased in over 2020 and 2021. He also wants to index the gas tax to inflation by 2023. This would generate an extra $6.5 billion over a 10-year period.

To soften the blow of the increase in the gas tax and fee hikes, Walz proposes an increase in the Working Family Credit by $100 for eligible single filers and $200 for each married filing joint recipient. Around 342,000 Minnesotans will qualify for this. 

Other fee hikes: He also wants to increase the vehicle registration tax from 1.25 percent to 1.5 percent starting January 2020, while the base tax fee would rise from $10 to $45. Meanwhile, motor vehicle sales tax would rise from 6.5 percent to 6.875 percent.

Roads, bridge, transit investments: Walz's proposal would spend billions of dollars over the next 10 years to maintain and repair Minnesota's deteriorating roads and bridges, cover "strategic expansion" on key roads throughout the state, and invest in more "mobility enhancements," such as MnPASS lanes.

He's expected to announce a $1.27 billion bonding bill next week, of which $330 million is earmarked for transportation and transit. 

Twin Cities transit: Gov. Walz wants to increase Twin Cities transit ridership by up to 40 percent, and build out 10 new Bus Rapid Transit lines within the metro area. His budget also includes money for 220 electric buses that would form part of Metro Transit's plans to be renewable by 2040. Much of the investment in the transit system would be paid for with the $770 million generated over 10 years as a result of the 0.375 percent increase in vehicle sales tax.

Health care

MNSure subsidy: The headline of Walz's health-care plan is to provide a 20 percent subsidy on the insurance premium for anyone who buys their health insurance through the MNSure health exchange.

"This proposal provides relief to Minnesotans with incomes over 400 percent of the federal poverty level do not qualify for the federal premium tax credit, and which helps lower the costs of health insurance premiums," Walz said, noting that around 80,000 Minnesotans will qualify for this.

Health care tax credit: Another effort to reduce the cost of health insurance comes in the form of a tax credit for anyone who is spending more than 10 percent of their income on health care. He wants this to be enacted by 2021, and says around 50,000 Minnesotans will see a reductions in their premiums by 2023.

Public options: Gov. Walz is also proposing that Minnesota's Department of Human Services offer its own platinum level health plan on the individual market, called ONECare, which would have a similar provider network and benefit levels to MinnesotaCare. He also proposes the state offer silver and gold-level insurance products "in any region of the state where the individual market fails to provide options."

"This approach ensures carriers still have a space in the private market while also ensuring that Minnesotans, regardless of where they live, have access to affordable, comprehensive coverage choices," he said.

You can find more about his health care proposals here.

Other key funding proposals

Working Family Credit increase: As well as the increase in the credit in response to the gas tax increase, Walz wants to expand it so that families with three or more dependents can claim it, leading to an average tax cut of $220 for over 44,000 Minnesotans.

High-speed broadband: Gov. Walz's budget includes $70 million to expand access to high-speed broadband to the point that every house in the state has access to it by 2020.

$170 million for affordable housing: This money would be used to maintain existing affordable housing in the state and create new affordable options.

Child care assistance: Walz wants to expand the Child Care Assistance Program with a $44 million investment to expand it to 15,000 more Minnesota families by increasing the payments to child care providers so they can keep their prices lower.

Paid family leave benefit: Walz is proposing $68 million over the next two years to create a paid family and medical leave benefit, to be paid out to those who can't afford to take unpaid or partially-paid medical leave to care for a family member, have a child, or recover from a serious health condition.

Help for small businesses: To help companies that struggle financially when someone takes extended leave, a new state insurance program for paid family and medical leave will cover the pay of a worker when they're out, freeing up cash for employers to pay overtime or hire a temporary worker.

Boost in local government funding: Walz wants to increase the amount given in Local Government Aid (LGA) and County Program Aid (CPA) by $30 million per year, so local governments can pay for services like the police, fund road improvements, and keep local property taxes low.

Cutting Social Security taxes for seniors: Walz wants to reduce the amount of tax taken from Social Security benefits, which will result in 56 percent of Minnesota recipients paying no taxes on their benefits.

Funding for Minnesota prisons: After a rise in incidents of assaults against state correctional officers, two of which proved fatal, Walz says he wants to spend an extra $2.7 million to hire an additional 120 correctional officers and 7 lieutenants in 2020 and 2021.

Next Up

Related