Walz’s 2-year budget proposal includes checks of up to $2,600 per household

According to Walz, the plan includes the largest tax cut in state history and a proposal to use part of the state’s more than $17 billion budget surplus for direct checks.

His direct payment plan, which differs slightly from last year’s plan, calls for $1,000 checks for single filers making less than $75,000 per year, $2,000 for families with an income under $150,000 and up to an extra $200 for each dependent with a max of three. That means a Minnesota family with at least three kids and an income under $150,000 would get checks of $2,600. Anyone making over those thresholds, however, wouldn’t get a direct payment.

HAPPENING NOW: Gov. Walz administration releasing 2-year budget proposal, including $8 billion in tax reductions via direct rebates, a reduction, but not elimination of Social Security income taxes and child care tax credits. Also proposes paying off US Bank stadium bonds early. pic.twitter.com/grF2Og0Lp2

— Tom Hauser (@thauserkstp) January 24, 2023

The tax cut proposal calls for reducing taxes on Social Security benefits, increasing the School Building Bond Agricultural Credit to support rural schools and directing more funding toward the Local Government Aid and County Program Aid programs to help pay for local infrastructure that typically relies on property taxes.

However, the Coalition of Greater MN Cities called the $30 million increase in funding to the Local Government Aid program “disappointing” and “inadequate.” “The $30 million increase doesn’t keep up with inflation,” CGMC president and Thief River Falls Mayor Brian Holmer said. “With a record-high surplus, this proposal is disheartening.”

In total, the governor says his plan features $8 billion in tax cuts. Of course, some areas of his plan also include new or increased taxes, such as on capital gains, where Walz is proposing a 1.5% surcharge on capital gains and dividends of individuals, trusts and estates over $500,000 and 4% on income over $1 million. It also calls for taxes on recreational marijuana, assuming that is legalized by the Minnesota Legislature this year.

Meanwhile, Minnesota’s Republican leaders weren’t thrilled by much of the governor’s budget proposal and said they’ve found many parts of it “that Minnesotans should be pretty concerned about going forward.”

Senate Minority Leader Mark Johnson and House Minority Leader Lisa Demuth called the overall spending in Walz’s plan excessive, said it treats schools unfairly and doesn’t address other areas adequately.

“If we can’t cut taxes now, when can we?” Demuth said, noting the large budget surplus.

She and Johnson also called Walz out for going against his word by not fully cutting taxes on Social Security income.

Demuth said Republicans are receptive to the direct payments back to Minnesotans — although they prefer permanent tax cuts — and also support early learning scholarships.

As previously reported by 5 EYEWITNESS NEWS, Walz on Monday unveiled the public health and safety portion of his budget while visiting the Roseville Fire Department. That includes $1.5 billion for affordable housing initiatives to fight homelessness and more than $300 million in local public safety aid.

That announcement followed last week’s $12 billion proposal centered on child care and education, as well as a $4.1 billion initiative for the local economy including agriculture and small businesses.

Cities, counties and tribal communities would be able to use the money for a variety of public safety programs, including hiring more staff.

“We’re looking across the spectrum on this. Addressing crime in the first place. Addressing gun violence. Mental health issues. Making sure we have stability, making sure the economy is thriving, and then making sure we have the folks who are tasked to take this on are there with a multi-dimensional approach,” said Walz. “If that means mental health, mental health counselors. If that means more police officers on the street, it’s more police officers, more firefighters.”

His proposal also includes funding for gun control measures like background checks and red flag laws, and there are millions of dollars in grants to help agencies buy body cameras.