Governor Tim Walz released his budget proposal for the FY20-21 biennium on Tuesday, highlighted by more than $3 billion in tax increases over the next two years alone, and $4.7 billion in tax increases for FY22-23. His proposal would raise Minnesota’s gas tax by twenty cents—a massive 70 percent increase—vaulting Minnesota’s gas tax to 4th highest in the nation. It also includes increases to tab fees, the motor vehicle sales tax, the Metro Area sales tax, business taxes, and reinstatement of the sick tax, which is set to expire at the end of the year, adding $1 billion to the cost of health care for Minnesotans over the next two years.
“Governor Walz’s proposal does nothing to lower the costs of health care,” said Rep. Dan Fabian (R-Roseau). “It reinstates one of the most regressive taxes in the state at a time when we have a $1.5 billion surplus. It’s unnecessary and wrong to ask Minnesotans to pay even more for already expensive health care when we have the opportunity to find real solutions to this problem.”
Sen. Mark Johnson (R-East Grand Forks) added, “Governor Walz unveiled his budget for the state, and like his predecessor, the Governor has outlined his desire to burden Minnesotans with higher taxes and fees along with attacks on the Second Amendment. With the economic challenges on Minnesota’s horizon and one of the highest tax burdens in the nation, it is simply irresponsible for the Governor to tax and spend in such a reckless way. Fundamental government reforms need to take place. Simply taxing and spending is not how we move our state forward. I believe we need a new way of thinking -not this failed approach – to keep Minnesota prosperous.”
“The Governor’s proposed tax increases, particularly the gas tax and the sick tax, are going to hit middle and low income families hard,” said Rep. Deb Kiel (R-Crookston). “There is absolutely no need to raise taxes by over $3 billion when we have a surplus. I’ll oppose any efforts to make Minnesotan’s health care and daily living more expensive.”
In FY20-21, the Governor’s budget raises general fund tax revenue by $1.224 billion. The extension of the sick tax adds an additional $947 million, with transportation-related taxes adding $907 million for a total tax increase of $3.078 billion. In FY22-23, the tax increases balloon dramatically; the governor increases general fund tax revenue by $1.43 billion, with another $1.52 billion for the sick tax and $1.73 billion in transportation taxes.