Minnesota House Democrats trim Walz budget

March 25, 2019

ST. PAUL — Democratic leaders in the Minnesota House unveiled a two-year budget Monday that trims Gov. Tim Walz’s overall spending plan while using new taxes on corporations to help pay for education and other programs.

The Democratic majority in the House announced a $47.8 billion spending limit for the next two-year budget. That’s about $1.5 billion less than Walz’s last proposal.

House Speaker Melissa Hortman, D-Brooklyn Park, said her values and priorities are similar to the Democratic governor’s, but added that the House is “more aggressive on tax fairness.”

“Years of Republican trickle-down economics and tax cuts for corporations and the wealthy have exploded income and wealth inequality,” Hortman said. “This inequality is bad for our economy. At the same time investments in public goods like education have stagnated and in some cases even fallen.”

House Democrats said they will look at closing corporate tax loopholes, among other potential tax changes, said House Taxes Committee Chairman Paul Marquart, D-Dilworth.

“I don’t think a business and a farmer should be paying more in taxes because some company is able to use gimmicks to shelter their profits in Bermuda,” Marquart said. “I don’t think it’s fair that a senior citizen or a working family should pay more in taxes because were letting some company get by with using gimmicks.”

While House leaders declined to delve into details, the tax and spending targets guide committee leaders as they develop major finance bills.

The real budget fight will start Thursday when Republican Senate leaders offer their spending blueprint. The House, Senate and Walz must reach an agreement before the end of session on May 20.

Republican lawmakers in the Senate said they saw too much spending in the Walz and House plans.

“Today House Democrats joined the Walz/Flanagan administration in a contest to see who could tax and spend the most and unfortunately, Minnesota families and taxpayers will be the ultimate losers,” Senate Majority Leader Paul Gazelka, R-Nisswa, said in a statement Monday.

He said Senate Republicans’ budget will use a $1 billion projected budget surplus to help avoid raising taxes.

House Minority Leader Kurt Daudt, R-Crown, also raised concerns about the additional spending and taxes in the Democrats’ plan, saying they should instead look to the surplus and eliminate fraud in state programs to save money.

Walz, meanwhile, said in a statement that he sees “lots to like” in the Democrats’ framework.

“Speaker Hortman and House DFLers are putting working people over big corporations, and their budget will make needed investments in Minnesota’s schools, healthcare system, and transportation infrastructure,” he said.

While cutting the governor’s overall budget, House Democrats proposed a $1.6 billion infrastructure borrowing bill that is larger than what Walz suggested. They also called for a 20-cent gas tax increase to fund transportation programs, giving their backing a key Walz proposal.

The House also opted to leave a nearly $635 million cushion to use for future budgets, a sum Republicans argue could be used to lower taxes.