Gov. Tim Walz is pitching his first budget under the Trump era as a counterweight to the incoming president’s threats to impose tariffs, which he says will raise costs on everyday Minnesotans.
Minnesota Gov. Tim Walz proposes lower sales tax rate, spending cuts in his budget
He must work with a divided Legislature to pass a budget before this summer or risk a government shutdown.
The Minnesota Star Tribune
January 16, 2025 at 6:58PM
His plan would lower Minnesota’s sales tax rate for the first time in state history by .075% across the board while expanding it to cover some previously excluded services. Facing a projected multi-billion deficit in the next state budget, Walz also wants to reduce ballooning costs for special education and disability services.
“It’s doable without denying services to a single person,” the DFL governor said on Thursday, using a powerpoint presentation filled with charts and graphics to help make his case.
The budget rollout is one of Walz’s first major actions since returning to the state following his failed bid for vice president. In December, he also laid out a plan that he says will crack down on fraud.
Walz is facing a new political reality with the Legislature now narrowly divided between the two parties. He will also have to work to craft a deal with Republicans, who criticized Democrats for passing the largest state budget in history two years ago when they had full control.
Passing a state budget is the main work on the agenda for this year’s legislative session. Lawmakers will get an updated economic forecast in February, but the governor is required under law to present his plan first. They face a July 1 deadline to strike a deal or risk shutting down government services.
Late last year, budget officials projected the state would have a modest $616 million surplus for the next two years, news that was overshadowed by the revelation that Minnesota’s budget is projected to be $5.1 billion in the red for the 2028-29 biennium.
State budget officials said long-term care for people with disabilities and special education costs are the biggest drivers of the projected deficit.
Democrats are expected to hold a one-vote majority in the Senate following a Jan. 28 special election to fill a vacant Minneapolis seat, but Republicans have a temporary 67-66 edge in the House until a Roseville area seat is filled in a separate special election on the same day. That could restore a tie in the chamber.
House Democrats are boycotting the legislative session until that election and accusing Republicans in the chamber of moving ahead with illegitimate proceedings.
Ryan Faircloth contributed to this report.
He must work with a divided Legislature to pass a budget before this summer or risk a government shutdown.
