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.

Confirmed Cases: 41571

Reported Deaths: 1537
CountyConfirmedDeaths
Hennepin13328790
Ramsey5169232
Dakota265596
Stearns249619
Anoka2393111
Nobles16846
Olmsted125920
Washington125541
Mower9822
Rice8798
Scott8584
Clay61238
Kandiyohi5901
Blue Earth5632
Wright5285
Carver4691
Todd4022
Sherburne3625
Lyon3332
Freeborn3120
Watonwan2670
Steele2451
Benton2363
St. Louis22316
Nicollet20312
Martin1755
Cottonwood1420
Winona14115
Goodhue1408
Le Sueur1251
Crow Wing11312
Pine1120
Otter Tail1111
Chisago1071
McLeod1000
Dodge960
Carlton900
Polk883
Unassigned8838
Isanti810
Chippewa801
Waseca770
Murray730
Itasca7112
Douglas700
Pipestone694
Morrison641
Becker620
Meeker621
Faribault610
Sibley582
Jackson570
Pennington530
Beltrami470
Brown442
Mille Lacs392
Wabasha380
Renville372
Fillmore350
Rock340
Swift331
Houston320
Yellow Medicine310
Grant250
Roseau250
Redwood230
Wilkin223
Koochiching211
Norman210
Cass192
Big Stone170
Kanabec171
Lincoln170
Wadena170
Aitkin150
Marshall130
Pope130
Clearwater120
Stevens110
Hubbard100
Mahnomen101
Lake60
Traverse60
Lac qui Parle50
Red Lake40
Kittson20
Cook10
Lake of the Woods00

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 34564

Reported Deaths: 747
CountyConfirmedDeaths
Polk7332184
Woodbury332944
Black Hawk249259
Buena Vista173711
Johnson14268
Dallas138531
Linn138183
Marshall109219
Scott103110
Dubuque94023
Story8575
Pottawattamie82112
Wapello71431
Muscatine68745
Crawford6803
Sioux5010
Tama48329
Wright3971
Louisa36513
Webster3655
Plymouth3465
Jasper34417
Warren3191
Dickinson2993
Cerro Gordo2841
Washington2519
Hamilton2011
Boone1681
Clay1491
Clarke1433
Allamakee1384
Clinton1321
Shelby1200
Mahaska11917
Carroll1131
Poweshiek1128
Bremer1107
Pocahontas1071
Franklin1040
Des Moines1002
Cedar951
Emmet950
Henry933
Hardin900
Cherokee831
Floyd812
Taylor810
Marion800
Monona780
Benton751
Guthrie754
Jones710
Butler682
Osceola680
Sac680
Buchanan631
Calhoun632
Iowa631
Jefferson620
Hancock601
Harrison600
Humboldt601
Fayette570
Jackson570
Lyon570
Delaware561
Madison552
Lee542
Monroe527
Palo Alto510
Clayton503
Grundy470
Mills470
Winneshiek460
Mitchell440
Davis421
Kossuth410
Union380
Howard370
Lucas354
Unassigned350
Winnebago340
Greene300
Chickasaw290
Cass280
Ida230
Keokuk231
Worth220
Appanoose213
Page210
Van Buren210
Audubon181
Adair170
Ringgold161
Decatur130
Montgomery122
Wayne110
Fremont100
Adams80
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