MINNEAPOLIS (WCCO) — Minnesota Gov. Tim Walz has released his two-year budget proposal, saying his package bolsters his education plan and offers economic relief for small businesses and families hurt by the COVID-19 pandemic.
The governor’s proposal is estimated at $52.4 billion. Walz presented his budget at a noon press conference.
The governor is seeking a 1.5% increase in the income tax for those earning $1 million or more. He wants the capitol gains tax to increase by 1.5% as well; that’s a tax on investment gains.
“Not every Minnesotan was impacted by the COVID-19 pandemic equally. We know the COVID-19 pandemic hit our working families, small businesses, and students particularly hard. They need our help,” Walz said. “The budget I am unveiling today will make significant strides in helping those Minnesotans stay afloat.”
Walz also wants an increase in the corporate tax rate from 9.8% to 11.25%. He wants to reinstate the estate tax exclusion, and called for an increase on cigarettes and vaping products.
The Walz budget is the first volley in what will be a showdown you will be hearing about through May and possibly longer. This is one of years that if they can’t agree on a budget there could be a government shutdown in July.
The state was projected to see a $1.3 billion deficit over the upcoming two-year period. However, state leaders are optimistic about a better forecast next month. Additionally, they say federal relief will help fill the gap.
The state Legislature must adopt a new budget before the current one expires on June 30.
Ahead of Walz’s announcement, Minnesota Senate Majority Leader Paul Gazelka, a Republican, called out the proposal as “not a Minnesota priority.”
“I have been clear since day one of session: we are not balancing the budget with tax increases. A budget that increases taxes is not a Minnesota priority,” Gazelka said in a statement. “People have suffered enough already. Employees, entrepreneurs, and many businesses have sacrificed for 11 months. The budget reserve can be used to protect people from hurtful tax increases that will further stretch their family budget and harm our economy. Senate Republicans will ask the government to tighten its own belt before we ever ask Minnesotans to tighten their belts even more.”
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Source: CBS Minnesota
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