Walz budget will give big boost to local governments

Gov. Tim Walz.
Minnesota Gov. Tim Walz at the state Capitol in St. Paul on Jan. 15, 2019.
Evan Frost | MPR News file

Just before DFL Gov. Tim Walz arrived at a Capitol-area hotel to speak to a few dozen local officials, the Coalition of Greater Minnesota Cities priorities were projected on a screen.

Atop the list was a $30 million annual boost to the program that sends state tax dollars back to cities to help them defray the cost of services. That amount would return the total pot of aid back to where it was in 2002 when adjusting for inflation.

As if on cue, Walz delivered.

"Our intention in a budget is to restore local government aid to 2002 levels," he said during brief remarks.

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But then the first Greater Minnesota governor in almost 30 years made an appeal to his audience.

"I am preaching to the choir but what I'm asking is for the choir to sing loudly for the next three months," he said.

Walz is bracing for battles over a gas tax he thinks should go up to fund future road work. And he's expecting stiff pushback over an extension of a tax on medical procedures which is set to end later this year to help pay for health care programs.

He hinted that there could be an income tax cut as part of his plan, noting that it's been almost two decades since that happened.

Walz said his forthcoming budget plan will contain other things rural residents will appreciate.

"A moonshot type of an approach toward broadband in Greater Minnesota," he said. "We don't have time to wait until 2025."

More reliable internet is essential for businesses and school children alike, he said.

It's all part of his three-pillar view that his budget must enhance education, health care and community prosperity.

Moorhead's new mayor Johnathan Judd was among the city leaders in the room who were pleased to hear Walz commit to a higher amount for local aid.

"To show that he has a vested interest personally and that it's going to be a priority for Greater Minnesota is a very big deal. Very happy about that."

It's important to keep sight of what the money goes for, Judd said

"It subsidizes our local efforts with our fire, police. It's a really big deal to make sure that our community has that aid coming in to keep those services supported, and it keeps our property taxes low," he said.

Walz's budget will be based on an assumption that the state has a $1.5 billion surplus, but another economic forecast will be out at the end of February, and there are signs the projected surplus could shrink.

Marty Seifert is a former Republican lawmaker from Marshall, Minn., who now lobbies for the Coalition of Greater Minnesota Cities.

He said the Walz's local aid package could be a point of compromise because the center of gravity for the Republican Senate majority is rooted in Greater Minnesota.

"It's a lift but $30 million is a rounding error in the whole budget," he said. "I really think that if they put it as a high priority, it will get done. Maybe at the end of the day, they trim it back a little bit."