The Latest: Walz budget includes tax increases, tax cuts

The Latest on Gov. Tim Walz’s budget proposal Tuesday (all times local):

2:10 p.m.
Gov. Tim Walz has proposed a $49 billion budget that includes a 20-cent hike in the state’s gasoline tax along with significant increases in spending on education and health care, while granting tax relief for many Minnesotans.

His proposal announced Tuesday includes a $523 million increase in state funding for local school districts, more aid to cities and counties, subsidies to cut premiums on the state health insurance exchange by 20 percent, and $70 million to ensure that all households in rural Minnesota have high-speed internet access.

The gas tax increase for roads and bridge improvements would free up general fund revenues that would be redirected to education.

Republican legislative leaders say their caucuses won’t accept the tax increases that the governor has proposed, given the state’s projected budget surplus.

12:25 p.m.
Gov. Tim Walz is rolling out a $49 billion budget with significant increases in spending on education and health and human services.

Walz’s first budget includes $733 million in new spending on pre-K through grade 12 education, plus another $158 million for higher education.

And it would devote an additional $284 million for new health and human services spending, including subsidies to help reduce premiums on the state health insurance exchange by 20 percent.

Walz, a Democrat, is also proposing to raise the gas tax by 20 cents a gallon to help pay for transportation projects.

Minnesota has a $1.5 billion surplus, but recent monthly revenue numbers suggest that number could shrink.

8:49 a.m.
Gov. Tim Walz is preparing to unveil his first budget proposal.

The two-year budget is expected to total around $47 billion to $50 billion. He scheduled an event for noon Tuesday to announce the details.

The governor’s office says his proposal will prioritize his campaign themes of public education, health care, and community prosperity. He has said in recent weeks that he would propose new money for rural broadband expansion, local government aid, affordable housing and mental health assistance for farmers.

Walz is also expected to make two proposals that Republicans have already said they’ll oppose — a gas tax increase to pay for transportation projects and preserving a health care provider tax that funds the MinnesotaCare health plan but is slated to expire at the end of the year.

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