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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: 485655

Reported Deaths: 6558
CountyCasesDeaths
Hennepin1007641586
Ramsey43106801
Dakota36297390
Anoka33293385
Washington22078256
Stearns18734201
St. Louis14805262
Scott13290107
Wright12526115
Olmsted1178988
Sherburne872872
Carver772640
Clay691587
Rice670491
Blue Earth594735
Kandiyohi579574
Crow Wing520681
Chisago499045
Otter Tail482170
Benton446490
Winona418349
Mower404731
Douglas392668
Nobles387047
Goodhue385768
Polk343162
McLeod339349
Beltrami337951
Morrison324547
Itasca313046
Lyon313044
Becker311342
Isanti306154
Steele300411
Carlton300149
Pine282016
Freeborn280723
Nicollet258641
Todd248030
Brown245037
Le Sueur235320
Mille Lacs227447
Cass220024
Waseca208717
Meeker207434
Martin189528
Wabasha18653
Roseau180217
Hubbard160640
Houston157314
Dodge15224
Renville149640
Redwood147027
Fillmore13728
Chippewa136335
Cottonwood134820
Pennington134416
Wadena130920
Faribault123017
Aitkin118833
Sibley117310
Watonwan11738
Rock115714
Kanabec107519
Pipestone101424
Yellow Medicine97617
Murray9448
Jackson93510
Swift87918
Pope8045
Marshall77815
Stevens7418
Lake74018
Clearwater71914
Lac qui Parle68416
Wilkin67110
Koochiching61811
Big Stone5163
Lincoln5062
Grant4918
Norman4788
Unassigned46768
Mahnomen4417
Kittson40921
Red Lake3625
Traverse3055
Lake of the Woods2191
Cook1180

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 362827

Reported Deaths: 5440
CountyCasesDeaths
Polk58260551
Linn20670313
Scott18318210
Black Hawk16258292
Woodbury14979211
Johnson1384874
Dubuque13562194
Dallas1138690
Pottawattamie10791143
Story1024945
Warren556674
Clinton543784
Cerro Gordo533782
Webster519587
Marshall497272
Sioux494869
Buena Vista474537
Des Moines458861
Muscatine452291
Wapello4345108
Jasper417766
Plymouth395378
Lee375452
Marion359169
Jones294154
Henry293337
Carroll286249
Bremer280854
Crawford275135
Boone259730
Washington254347
Benton253854
Mahaska224746
Jackson221638
Dickinson217840
Tama213765
Kossuth208555
Clay193625
Hamilton192142
Delaware189140
Winneshiek189127
Buchanan185729
Fayette185235
Page183319
Hardin181439
Wright179931
Harrison179469
Cedar178523
Clayton168154
Butler167231
Mills163020
Floyd162741
Cherokee154836
Madison154718
Poweshiek154330
Hancock147130
Allamakee146747
Lyon145941
Iowa145023
Appanoose139247
Grundy139230
Jefferson138734
Winnebago138631
Cass134751
Calhoun133811
Mitchell130940
Louisa128241
Union126631
Chickasaw125215
Sac124618
Emmet121740
Shelby121733
Franklin118319
Humboldt117925
Guthrie116628
Palo Alto105221
Montgomery104136
Howard102921
Clarke100420
Unassigned9900
Keokuk98229
Monroe93328
Adair92128
Ida91432
Pocahontas85419
Davis83123
Monona81627
Greene77510
Lucas74021
Osceola70615
Worth6997
Taylor66612
Fremont5909
Decatur5829
Van Buren56118
Ringgold52320
Wayne48921
Audubon4889
Adams3274
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