Minnesota House DFL leaders outlined a two-year budget proposal Tuesday that focuses on helping students, workers, families and small businesses hit hard by COVID-19 and pays for it in part with as yet unspecified tax increases.
The proposal lines up closely with a revised budget that Gov. Tim Walz unveiled last week.
The Democratic-Farmer-Labor Party governor called for spending $52.4 billion over the next two years, including $670 million in new taxes. The House DFL plan would cost $52.5 billion. Senate Republicans proposed a $51.9 billion budget earlier last week with no tax increases and nearly $600 million in tax relief.
So now the three major players involved in negotiating a new state budget — House DFLers, Senate Republicans and Walz — have put their initial bargaining positions on the table.
“We could have a big-picture agreement before the end of April,” House Speaker Melissa Hortman, DFL-Brooklyn Center, said during a virtual news conference. But budget talks typically drag out to the end of the legislative session — May 17 this year — and could spill over into summer. Lawmakers must act by July 1 to avoid shutting down state government.
The three spending plans don’t take into account the projected $2.6 billion in federal stimulus aid headed to the state under the $1.9 trillion American Rescue Plan that President Joe Biden signed earlier this month.
“Understanding how all that federal money will be used and how it’s directed while we’re putting together a $52 billion budget will be the biggest challenge of the session,” Hortman said.
But with all that federal money plus a $1.6 billion state surplus, House Minority Leader Kurt Daudt, R-Crown, said DFLers are “tone deaf to be pushing for tax increases on struggling Minnesotans when government is flush with cash.” GOP leaders have insisted throughout the session that they will not raise taxes, and Daudt reiterated that the DFL proposal is “built on tax increases that will never happen.”
DFL leaders argued the state must invest more in helping Minnesotans who are falling behind.
“Minnesota in the long run has been stagnating,” said House Majority Leader Ryan Winkler, DFL-Golden Valley. “Our schools have become more average than above average. Widening racial gaps in almost every measure, from health to income to education, means that a whole generation looks to a less prosperous, less equitable future in Minnesota than what we have seen in the past.”
He said the DFL plan would help workers and families get ahead. It includes:
- A $722 million increase in E-12 education after a difficult year of remote learning, plus a $50 million boost for child care.
- $323 million more for health and human service programs.
- A $120 million increase for state colleges and universities.
- An additional $71 million to enhance public safety.
- A $57 million boost for workforce and business development.
To pay for it, Hortman said, “We’re raising significant, progressive revenues in this budget.” But neither she nor House Taxes Committee Chairman Paul Marquart, DFL-Dilworth, would say where the money would come from.
Marquart did say, however, that the tax bill will provide tax cuts for workers, families and businesses to be paid for by the new revenue. That will result in a “net zero change” in taxes overall, he said.
“The tax bill will be out in the first week in April,” Marquart said.
The Legislature starts its 10-day Easter/Passover on Friday and returns to work April 6.
