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Gov. Tim Walz's first budget contains lots of things that leaders from outside the Twin Cities area have been seeking — more money for schools, local governments, highways and rural broadband to name just a few.

Big gas tax hike; more money for schools, health, roads

Walz calls on Minnesota to meet needs of 'the whole child'


But the new Democratic governor's chances of delivering on them will depend on whether he can find enough support among GOP senators, who come mostly from outside the Twin Cities metro area and generally oppose the tax proposals that would fund his spending initiatives, such as a 20-cent gas tax hike. Senate Republicans expanded their narrow majority to three votes with a special election win this month, gaining a little extra cushion for standing firm.

Senate Majority Leader Paul Gazelka said Wednesday that he doesn't think he'll have trouble keeping his caucus united against tax increases, even though Walz's budget includes many proposals that could help their districts. Even if the final forecast on the budget surplus comes in next week lower than the $1.5 billion projected in November, he said that'll be enough for a "good budget that meets the needs of all of Minnesota" without raising taxes.

"We're going to fight to say, 'Let's live within the resources we have,'" he said.

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Still, Gazelka said the governor's proposals for expanding rural broadband, making schools safer, and increasing state aid to cities and counties are areas where Republicans and Democrats can find some common ground. Democratic House Majority Ryan Winkler counted some of the same issues as opportunities, but said his caucus is likely to back Walz on the gas tax, which would raise a lot of money for roads and bridges in a part of the state that often feels shortchanged compared with the Twin Cities.

"I don't know that the Senate will ever like it, but everybody has to give something for us to put a budget together by the end of session," Winkler said.

Bradley Peterson, executive director of the Coalition of Greater Minnesota Cities, called Walz's budget "tremendously positive for greater Minnesota." He said he's hopeful that rural Republican lawmakers will take a close look.

The budget Walz unveiled Tuesday would spend nearly $49.5 billion over the next two years, an increase of just over $2 billion from the current budget, which runs through June 30. It includes nearly $1.27 billion in tax increases for the general fund. That doesn't include the gas tax increase, which would pump $1.9 billion annually into a separate highway fund when it's fully phased in. He also proposes to preserve a tax on health care providers that's due to expire at the end of the year. His budget doesn't count that as a tax increase, but Republican leaders argue that it is.

Some highlights for greater Minnesota include:

--Boosting the state's basic per-pupil aid formula by 5 percent so that the state covers an even greater share of public school costs, reducing the need for school boards to keep going back to their voters. Rural districts have a poor track record in those referendums because of their lower household incomes and property values.

--Restoring local government aid for cities and program aid for counties to 2002 levels. Rural cities and counties use the aid to hold down property taxes. "Local government aid is not that big a piece of the state budget but it has a huge impact in terms of helping communities across the state thrive," Peterson said.

- Launching a $70 million "moonshot" to ensure that all rural Minnesota households have high-speed internet access by 2021.

- Increasing access to affordable child care for rural families to remedy a shortage that forces many to drive long distances to get it and makes it harder for rural employers to hire the workers they need.

- Compensating farmers with a $50 per-acre property tax credit for land taken out of production to meet the state's requirement that they plant buffer strips between their fields and watercourses to filter out pollution.

Groups that lobby for Minnesota's cities, counties and schools are optimistic that the two sides will resolve their differences.

"Senator Gazelka talks about the value of education, as do other senators," said Fred Nolan, executive director of the Minnesota Rural Education Association. "So I think they'll figure out a way to be able to make sure that greater Minnesota thrives."

Associated Press

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Gov. Tim Walz's first budget contains lots of things that leaders from outside the Twin Cities area have been seeking -- more money for schools, local governments, highways and rural broadband to name just a few.

Walz needs GOP help to deliver on agenda for rural Minnesota

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