Walz Introduces State Budget Plan Aimed at Helping Students, Recovering from COVID-19

Eric Dunham from Pixabay

(KNSI) – Minnesota Governor Tim Walz Tuesday revealed his biennial budget proposal, which he is dubbing “Minnesota’s COVID-19 Recovery Budget.”

The budget math for fiscal years 2022 and 2023 will look to fill a $1.28 billion budget gap by carrying over $217 million from the current budget, dip into just over a billion dollars in the budget reserve and take $130 million from the stadium reserve.

Walz is also looking at $1.66 billion in additional revenue, which would include $230 million in tax cuts and reducing spending by $150 million for $1.3 billion in Net New Investments.

The plan emphasizes funding education and countering the economic effects of COVID-19.

“We know that when workers are supported, when children are supported, when qualify of life is supported, it creates and economic environment where things thrive,” Walz said, “and we’re going to ask those that are most fortunate and those corporations that have profited during this time to pay a fair share to make sure that we can continue to provide the services we need.”

One notable proposed change is the expansion of the state’s first income tax bracket (which currently caps out at $39,810 for married couples filing jointly), which could get a tax cut. This is proposed alongside creating a fifth income tax bracket for the wealthiest households: singles earning more than $500,000 and married couples filing jointly with more than $1 million in yearly earnings. This fifth tier’s taxation raises more than $400 million, says Minnesota Management and Budget Commissioner Jim Schowalter.

“Ninety-nine-point-three percent of Minnesotans will not be affected by this fifth tier,” Schowalter said.

Walz also proposes expanding the Working Family Tax Credit to include 300,000 more households and, for small businesses, $50 million allocated for a forgivable loan program.

The Minnesota Legislature will need to install a new two-year budget plan before fiscal year 2022 begins on July 1st.