Gov. Walz’s budget is “out of sync” with Minnesotans
By: Senator Carla Nelson
The biggest objective of the 2021 legislative session is constructing a new two-year state budget. This is a task that must be accomplished in every odd-numbered year. The process generally begins with the rollout of the governor’s budget near the end of January. Some of you may have read about the governor’s budget offer already, but I wanted to go over some of my issues with his proposal.
Frankly, the governor’s budget is pretty indefensible. For those of you who know me, that might seem like startling language. I am a person who believes the best policy is made by working across the aisle and coming up with the best ideas of both parties. I value bipartisanship, cooperation, and negotiation.
That should tell you just how unserious the governor’s budget proposal is.
Minnesotans are struggling through a pandemic, yet he is asking for a spending increase of $4.5 billion. That is an increase of 9.5%. He is asking for $1.6 billion in new taxes. He takes a billion from the budget reserves. He increases fees by $61 million. And he wants all these things after the federal government has already allocated $8 billion to us, with more on the way.
And to top it off, he wants to tax Minnesota businesses for their federal Paycheck Protection loans. You’ll recall that these were the emergency rescue loans that businesses used to keep people employed during the pandemic. The federal government has already exempted them from federal taxes. I have a bill that would exempt them from state taxes as well; I had hoped the governor would be on the same page.
The governor is proposing more than $1.6 billion in tax increases on Minnesotans. He claims many of these taxes only affect corporations and high-income earners, but this proposal in many ways is similar to his budget proposal 2 years ago, which would have fallen mainly on individual taxpayers and regular Minnesotans according to an analysis by his own Department of Revenue. So when you read that he is just taxing the rich, be skeptical.
Minnesotans are stressed from the pandemic, both in terms of their health and their finances. It is unfair to ask them to sacrifice even more than they already have. Instead of asking Minnesotans to pay more, we should expect a targeted, results-driven use of the $8 billion in funding we have already received from the federal government, as well as the significant federal money likely heading our way as part of President Biden’s $1.9 trillion federal American Rescue Plan. And as always, Minnesotans should expect a responsible, effective use of their own state taxpayer dollars.
I believe we can find a compromise. I will always be willing to listen to what others have to say, regardless of their political affiliation, in an effort to reach a state budget that works for everyone while protecting taxpayers.
But the fact of the matter is that the governor’s budget proposal is simply out of sync with what Minnesotans are facing right now. We’ve got a long way to go in order to get to a place of compromise.