Gov. Walz rolled out his very bulky budget last week, $65.2 billion. This is the largest budget in state history, all during a time of inflation that’s hitting the pocketbook of every Minnesotan. The last budgeting year, in 2021, saw Walz propose a $52.4 billion bi-annual budget for comparison.
Part of the budget plan gives back some of the $17.6 billion budget surplus but spends most of it. Experts say that historic inflation and extra COVID funds are the cause for the surplus. Granted, those COVID funds, and hopefully inflation, won’t likely be factored into this biennial budget, so maybe that’s why he’s shooting high.
But more government programs, less tax cuts for the middle class and the promise to return the surplus to the voters, among other things this budget is doing, is disappointing,
The sum of the rebate checks are expected to total about $4 billion of the state’s $17.6 billion surplus. The rest is likely to be spent.
The rebate checks from the budget surplus will likely be $1,000 for individuals making less than $75,000 a year, and if you file jointly, $2,000 for families earning under $150,000 per year. Households would also receive an extra $200 per dependent (limit of three). Walz is also proposing child care tax credits for families making under $200,000, while proposing tax credits for lower-income families.
There are some noble characteristics to his plan aimed at making Minnesota the “best state in the nation for children” and “improving public safety,” but at what cost, and will it really make a difference?
Many people, including myself, feel Minnesota is being overtaxed as one of the Governor’s proposals is to pay for every student’s school lunch. Even the Edina kids and other families who can afford to pay for their kids’ lunches will be provided for in his “Universal School Meals” plan.
This increase alone is estimated to cost $3.8 million in fiscal year 2024-’25 and $4.24 million in fiscal year 2026-’27. This, along with increasing the general education funding formula and reducing special education cross subsidies, will add up to about $3 billion.
Teacher recruitment, to the dollar amount of about $25 million, is also in the plan with the current teacher turnover crisis and low teaching program enrollment. This would include teacher stipends, grants for teachers in less desirable areas of the state or academic disciplines, along with more loan repayment; scholarships for those pursuing early childhood education; and grants to encourage secondary students to go into the teaching profession after college.
Teaching is one of the toughest jobs out there and teachers do deserve more pay, but I don’t think throwing money at the existing problems in the schools is going to help with the struggling teaching climate. There are so many other issues that need to be addressed to retain our teachers, and if the government would just back off of education and let local school boards, and the state to some extent setting their standards, govern their schools, we would be in much better shape.
The U.S. Bank Stadium reserve was borrowed from in the 2021 biennial budget because of a budget shortfall, to the tune of $130 million. In this budget cycle, Gov. Walz proposes to pay that back and pay off the loan early which will equal $377 million. This is estimated to save the public about $30 million in yearly interest.
A new online driver’s licensing renewal program is slated to be set up, and new-to-Minnesota drivers would no longer have to take a knowledge test to obtain a license.
The government is likely to grow as the Governor is proposing an Office of Cannabis Management to help regulate recreational marijuana, a cannabis expungement board which would streamline the process to wipe off past marijuana-related convictions, a Statewide Internal Audit Office (because you have to spend money to see where fraud and waste are happening in the government apparently), Direct Care and Treatment program which is part of the Department of Human Services. This Human Services sub-department will better target those who are civilly committed, have severe mental illness or have substance abuse disorders.
A new special investigations unit is also being proposed which would assist local law enforcement in finding people who go astray while they are on supervised release. The light-on-crime trend to reduce bail amounts might have something to do with this.
An additional $115 million will be spent on outdoor recreation to upgrade facilities on public lands and other outdoor measures to encourage more outdoor activity.
Another big expenditure is $750 million to fund “cleaner transportation” coming in the form of electric buses to replace diesel buses, providing matching funds for federal dollars (ie… NLX) and creating more EV charging stations.
And to help fund the metro transit, which has almost doubled in cost since 2011 from just under $500 million to just over $900 million in 2021, a 1/8th cent sales tax is being recommended in the seven-county metro area.
Other proposed expenditures are $4.1 billion for the paid family and medical leave program, $1.5 billion toward affordable housing with emphasis on eliminating veteran homelessness.
To generate revenue, Walz is also proposing a 1.5% surcharge on capital gains and dividends exceeding $500,000 and a 4% surcharge on those exceeding $1 million. This is expected to generate approximately $660 million over two years.
Though Gov. Walz is proposing to reduce Social Security taxes for seniors, I would propose, and some DFL candidates ran on, eliminating it altogether for our seniors. A democratic-led bill to eliminate Social Security tax altogether has been proposed this session, so we’ll see how serious they are about this as eliminating the tax would reduce revenue by about $1.1 billion over two years.
Many of these proposals I do not recall Gov. Walz running on. Or other DFL legislators who stand behind him and are approving extreme bills such as the DFL-led abortion bill. I don’t know of many laws that don’t have boundaries or guardrails that this bill has as all amendments to the bill were rejected.
The budget, now that both the Senate and House are under Democratic control, is expected to pass the legislature.
Bottom line, there are no “free” lunches, unless you’re Gov. Walz. Someone pays. The middle class and beyond pay. I suppose the argument is that you’re taxing the “wealthy,” but Gov. Walz may be taxing the “wealthy” (which includes middle-class and elderly I guess) right out of Minnesota with his ever-increasing bloated budget.
Traci LeBrun is the editor of the Pine City Pioneer.
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