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Walz tweaks budget plan to reflect slower economic growth

AP image - Minnesota Gov. Tim Walz

Gov. Tim Walz announced a series of tweaks to his budget proposal Friday to reflect projected slower economic growth but stood by his tax plans, which have aroused strong Republican opposition.

Posted: Mar 22, 2019 3:21 PM

ST. PAUL, Minn. (AP) — Gov. Tim Walz announced a series of tweaks to his budget proposal Friday to reflect projected slower economic growth but stood by his tax plans, which have aroused strong Republican opposition.

The Democratic governor said at a news conference that his administration took a hard look at his proposed two-year budget for 2020-21 and scaled back some proposals while sparing his priority areas like education and health care.

Walz unveiled his initial budget proposal a month ago, which was based on earlier projections of a $1.5 billion surplus. It included what he called a "fiscally cautious and prudent" cushion of $789 million in anticipation of a weaker economic forecast in late February that cut the surplus to $1 billion. That lower projection prompted him to order changes to preserve a cushion of $562 million and leave the state in a "fiscally solid place" heading into the 2022-23 budget, he said.

"The revised budget is balanced, it is fiscally sound," Management and Budget Commissioner Myron Frans said. "Our revised budget continues to invest in education, health care, community prosperity and provides a positive balance in '22 and '23."

Altogether the changes Walz announced Friday include reductions in proposed new spending of $131 million, tax changes that would bring in an additional $65 million partly through closing what he called corporate tax loopholes, returning $142 million in unspent health care reinsurance funds to the general fund, and new spending of $37 million that would go mostly to higher education. The overall general fund budget would dip from $49.5 billion to $49.4 billion.

His proposed new spending also includes an extra $2.1 million to strengthen oversight of the state's Child Care Assistance Program following a critical legislative auditor's report last week that found significant levels of fraud within the program. And it includes $1.1 in additional funding to address continuing fallout from the botched 2017 rollout of the MNLARS vehicle registration system. But he dropped a proposed $700,000 increase in his office budget for outreach efforts.

Republican leaders criticized Walz for standing by his earlier proposals for a 20-cent gas tax increase to fund road, bridge and public transit improvements; for preserving a 2 percent tax on health care providers that expires at the end of the year; and for replacing the state's health care reinsurance program, which pays carriers to help hold down premiums on the individual market, with a more direct premium subsidy for consumers.

While the House Democratic majority supports Walz on those plans, they've met with strong GOP resistance, which matters in the Senate, where Republicans hold a narrow three-seat majority. Senate Finance Committee Chair Julie Rosen said the revision still spends and taxes too much.

"The effort today is appreciated, but Gov. Walz's budget still spends more than we can afford," she said in a statement. "His dependence on taxing sick people and raising the gas tax is not a sustainable solution."

Republicans generally favor funding transportation improvements and the health care programs supported by the provider tax out of the general fund instead, and they count preserving the provider tax as a tax increase, which Democrats don't.

"The governor should focus on helping Minnesotans keep more of their hard-earned money, and work to fund basic priorities like roads and bridges with our state's budget surplus, rather than making health care more expensive and driving up the cost of everyday goods and services for all Minnesotans," House Minority Leader Kurt Daudt said in a statement.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 289303

Reported Deaths: 3434
CountyCasesDeaths
Hennepin616511100
Ramsey25903487
Anoka20522218
Dakota20096183
Washington13066109
Stearns1291098
St. Louis7935101
Scott782754
Wright702436
Olmsted626134
Sherburne538640
Clay463856
Carver432213
Blue Earth387112
Rice386033
Kandiyohi373819
Crow Wing334631
Nobles298729
Chisago29358
Otter Tail282818
Benton278642
Winona258128
Mower241323
Douglas237631
Polk234423
Morrison219524
Lyon201911
McLeod195610
Beltrami194615
Becker187512
Goodhue185727
Steele17826
Itasca176124
Isanti174316
Todd171612
Carlton165710
Nicollet150823
Freeborn14465
Mille Lacs141630
Le Sueur138110
Waseca134011
Cass12849
Brown125011
Pine12458
Meeker11308
Roseau10503
Hubbard103822
Martin101920
Wabasha9611
Redwood83718
Dodge8060
Chippewa8057
Watonwan7984
Cottonwood7682
Renville75119
Sibley7414
Wadena7376
Aitkin69826
Rock6829
Pipestone67818
Houston6422
Fillmore6320
Yellow Medicine59311
Pennington5856
Kanabec54912
Murray5493
Swift5366
Faribault5081
Pope4990
Stevens4643
Clearwater4536
Marshall4438
Jackson4361
Unassigned38759
Lake3816
Koochiching3535
Wilkin3465
Lac qui Parle3383
Norman3227
Lincoln3171
Big Stone2841
Mahnomen2704
Grant2516
Red Lake2033
Kittson1917
Traverse1360
Lake of the Woods931
Cook600

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 220032

Reported Deaths: 2282
CountyCasesDeaths
Polk32695327
Linn13801164
Scott1068881
Black Hawk10631132
Woodbury10061120
Johnson932336
Dubuque904191
Story666620
Dallas619957
Pottawattamie602967
Sioux362025
Webster348432
Marshall342044
Cerro Gordo340644
Clinton315939
Buena Vista297914
Des Moines278218
Muscatine278268
Warren270510
Plymouth265639
Wapello248671
Jones226913
Jasper210942
Marion200019
Lee195416
Carroll194621
Bremer188712
Henry17917
Crawford172015
Benton165116
Tama151540
Jackson140712
Delaware139621
Washington136914
Boone132911
Dickinson132710
Mahaska124127
Wright11986
Buchanan114110
Clay11184
Hardin111310
Page11074
Clayton10665
Hamilton10657
Harrison104328
Cedar103913
Calhoun10387
Fayette10149
Floyd100914
Mills10097
Kossuth10076
Lyon9988
Poweshiek97113
Butler9566
Winneshiek93311
Iowa91712
Winnebago89723
Hancock8417
Louisa83616
Grundy82611
Sac8207
Chickasaw8174
Cherokee7984
Cass78821
Mitchell7664
Appanoose76510
Allamakee76411
Shelby7469
Humboldt7435
Union7396
Emmet73624
Guthrie73015
Franklin71221
Jefferson6742
Madison6684
Palo Alto6244
Unassigned6170
Keokuk5647
Pocahontas5512
Howard5319
Greene5140
Osceola5101
Clarke4764
Ida46411
Taylor4513
Montgomery44610
Davis4455
Monroe43712
Adair4258
Monona4182
Fremont3523
Van Buren3524
Worth3470
Lucas3206
Decatur3120
Wayne2936
Audubon2922
Ringgold1982
Adams1612
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