Walz proposes banking most of surplus over COVID-19 fears
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Gov. Tim Walz has proposed banking $1.2 billion of Minnesota’s projected $1.5 billion budget surplus because of the uncertainties over how the new coronavirus will affect the economy.
The Democratic governor’s supplemental budget would add only $256 million in new spending on programs to the budget the Legislature approved last year.
It includes his earlier proposal to pay back $491 million into the state’s rainy day fund to maintain it at $2.4 billion.
Walz says his proposal ensures that Minnesota will be in as strong a fiscal position as any state while providing enough flexibility to respond to the pandemic.
"This is a one-page budget," Walz said as he held up his supplemental budget plan. "It is a one-page budget focusing on those priorities of emergency responses that Minnesotans need to move forward."
Minnesota Gov. Tim Walz speaks with reporters at the Capitol in St. Paul, Minn., Tuesday, Oct. 1, 2019.[AP/ Steve Karnowski]
The governor says he wants to leave $1.2 billion of the surplus on the bottom line for what he’s certain will be significant needs to boost the economy after the full impact of COVID-19 in Minnesota.
"Like what do we do with folks who don’t have paid leave," Walz said about minimum wage employees who might have to stay home when sick. "How do we make sure that happens? There are going to be resources needed during this pandemic that make sense to me to leave those numbers on the bottom line so we’re in a position to be flexible and react."
Minnesota Management and Budget Commissioner Myron Frans says there’s little doubt the state’s economy will take a major hit from the coronavirus, at least in the short term.
"Clearly the situation is changing, but we’re not really going to have an opportunity to change any (budget) numbers until we see this play out a little bit longer," Frans said at a State Capitol news conference alongside the governor. "We will be monitoring this on a daily basis providing the governor and the leaders with information about changing revenue streams, about changing expenditures. Both sides of the equation are changing on a daily basis."
The state’s next official economic update with tax revenue and expenditures is due out on April 10.