Walz poised to propose budget that reflects his values

Minnesota Gov. Tim Walz
Gov. Tim Walz will propose his first two-year state budget Tuesday that is expected to total nearly $50 billion.
Tim Pugmire | MPR News

Gov. Tim Walz said his budget will be a moral document that reflects his values. During an event at the University of Minnesota last week, the former high school teacher emphasized that funding for public education, from preschool through college will be a top priority.

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"The way that we can be competitive and ensure quality of life for all of our citizens is first and foremost focus on education. We can't afford to let a single person drop through," he said.

The statewide teachers' union Education Minnesota is pressuring Walz to follow through. The union's president Denise Specht said last week they expect a big investment in schools.

"The money is there. I believe scarcity is a myth, and I believe the public is behind us," Specht said.

Walz has also dropped hints about other budget initiatives. He said he will propose new money for rural broadband expansion, local government aid, affordable housing and mental health assistance for farmers.

Walz is also expected to propose a gas tax increase to pay for highway projects and recommend that a health care provider tax remain in place rather than expire as scheduled at the end of the year.

Gov. Tim Walz and his wife Gwen greet Senate Majority Leader Paul Gazelka.
Gov. Tim Walz, center, and his wife, Gwen, greet Senate Majority Leader Paul Gazelka at the Governor's Residence Feb. 6, 2019.
Christine T. Nguyen | MPR News

"I am not willing to drop 35,000 people off Medical Assistance or MinnesotaCare, and I am not willing to send us back in health outcomes that in the long run cost us more," he said. "So, I will make that case."

Republicans oppose keeping the provider tax. They also oppose an increase in the gas tax.

Senate Majority Leader Paul Gazelka said Senate Republicans will work this session to protect taxpayers. He said spending cuts in health and human services could help replace the provider tax revenue and keep MinnesotaCare funded.

"We know that we have to address waste and fraud in there, and that will be the big discussion," Gazelka said. "Gov. Walz wants to continue, or we would say raise the tax, because it is going away. So, that's where his position is. So, we're exactly opposite on that position."

Democrats in the Minnesota House, on the other hand, are expecting to support the governor's budget plan. House Speaker Melissa Hortman said the agendas have been very similar since last year's campaign season.

"We had the Minnesota Values plan. They had One Minnesota. When you look at those, there is tremendous overlap," she said. "We are both very committed to making sure all Minnesota children get a world class education and that Minnesota families have more affordable and accessible high-quality health and that families are more economically secure. I trust that his budget will move us in that direction."

Hortman said she has not talked to Walz about taxes, but she expects whatever he proposes will align with her values.

The governor based his budget proposals on the state economic forecast released late last year. At that time, there was a projected $1.5 billion budget surplus. A revised forecast due next week could look a lot different. Recent monthly updates showed tax revenues dipping.

House and Senate leaders will use next week's revised forecast numbers to develop their competing budget proposals over the remaining months of the legislative session.

Still, many interest groups are looking to get some of the available surplus.

During a recent committee hearing, Rep. Greg Davids, R-Preston, described the challenge he believes Democrats are facing this year, as they try to meet a long list of spending requests.

"It's kind of like trying to suck a watermelon through a garden hose," he said. "I've tried it many times. It's hard."