ST. PAUL, MN—Governor Tim Walz released his budget proposal for the FY20-21 biennium on Tuesday, highlighted by more than $3 billion in tax increases over the next two years alone, and $4.7 billion in tax increases for FY22-23. His proposal would raise Minnesota's gas tax by twenty cents—a massive 70 percent increase—vaulting Minnesota's gas tax to 4th highest in the nation. It also includes increases to tab fees, the motor vehicle sales tax, the Metro Area sales tax, business taxes, and reinstatement of the sick tax, which is set to expire at the end of the year and would add $1 billion to the cost of healthcare for Minnesotans over the next two years.
Following the announcement, State Rep. Mary Franson (R-Alexandria) issued the following statement.
“The governor’s budget proposal makes life more expensive for every Minnesotan,” said Franson. “Despite our state’s $1.5 billion surplus, this budget would raise taxes by more than $3 billion dollars. These tax hikes will hurt families, increase the price of gas, and make healthcare more expensive. The governor’s proposal grows government and imposes unfair tax increases that would hit middle class Minnesotans the hardest. This budgets spends at an unsustainable rate, but fails to prioritize combatting fraud, waste, and abuse. The governor is proposing pumping more money into childcare assistance with no real reforms to stop the rampant fraud of these funds. Minnesotans expect and deserve a better, more responsible budget.”
In FY20-21, the Governor's budget raises general fund tax revenue by $1.224 billion. The extension of the sick tax adds an additional $947 million, with transportation-related taxes adding $907 million for a total tax increase of $3.078 billion. In FY22-23, the tax increases balloon dramatically; the governor increases general fund tax revenue by $1.43 billion, with another $1.52 billion for the sick tax and $1.73 billion in transportation taxes.
Under the proposed budget, the Child Care Assistance Program (CCAP) is expanded and payments are increased. In total, $43.93 million in FY 2020-21 and $150.25 million in FY 2022-23 is added to CCAP in FY 2020-21.