Governor Tim Walz (DFL) released his budget this week, which he calls a “moral” document that is comprised of nearly $50 billion in state spending which included billions worth of new spending and tax increases. The current state budget is $45.5 billion with state spending expected to grow by about $2 billion over the next two years if lawmakers do nothing new due to inflation, population growth and expanding programs and services.
Walz’s budget would add $2 billion more in new spending and taxes would increase by $1.3 billion to pay for it, with the rest of the money coming from an existing $1.5 billion surplus. However, some of his priorities may need to be reshaped next week when the state’s newest budget and economic forecast projections along with a new surplus estimate are released.
Among his budget proposals is a 70 percent tax hike to the current 28.6-cent state gas tax, which would equal 20 cents per gallon. If approved, the money would go to roads and bridges in the state, raising $1.9 billion. He would also increase registration fees and vehicle sales taxes to fund a 10-year, $11 billion transportation plan. Among other spending areas, is an additional $523 million for E-12 classrooms, and create a $60 million paid-family-leave program
Republican leaders say they are shocked by the size and scope of Walz’s “One Minnesota” budget, which they dubbed “One Expensive Budget.” They say it catapults Minnesota into one of the highest-taxed states in the country.
Minnesota currently has the only divided state legislature in the country after the DFL won control of the House of Representatives in 2018 and they hold a 75-54 majority. The Senate is where the budget battle will occur as the GOP holds a 35-32 majority. Walz will face an uphill battle to convince lawmakers that his priorities are the right ones for the state.
This week, both the House and Senate had a focus on solar. The Senate Energy and Utilities Committee heard two bills on community solar gardens, while the House Energy and Climate Committee passed a bill that would provide grants to schools, through the Department of Commerce, to install solar on or near school facilities. Testifiers in support estimated that the program could help over 200 schools at an average of $500,000-$550,000 for each project. There were concerns, however, from the utilities, that such a program would allow for-profit solar companies to circumvent the strict regulatory process required of all other players in the utility market.
On Thursday, the Senate passed SF100 (Osmek) on Energy Storage Pilot Projects, 63-0. Earlier the same day, the House took up the companion bill in the Energy and Climate Committee, and amended the bill with a number of new sections. Lawmakers voiced concerns that changing the bill by adding new mandates and required dates, it was going against what was previously agreed to. Ultimately, the bill was laid over for possible inclusion in the Energy and Climate omnibus bill.
Next week, the House Energy and Climate committee will be reviewing two bills from the Governor’s budget for the Pollution Control Agency, the House Agriculture committee will be looking at the impacts of climate change on farming. On Tuesday, the Senate Energy and Utilities committee will receive a overview from MISO on regional energy markets.