Everything that is covered in the text below was also reviewed with more detail in the recording of the IFO Legislative Update. You can watch that full video here. Click here for the presentation documents from the recorded update.
Gov. Walz Budget Overview:
Governor Walz has released his proposed 2022-2023 budget. He said about the budget, "Not every Minnesotan was impacted by the COVID-19 pandemic equally. We know the COVID-19 pandemic hit our working families, small businesses, and students particularly hard. They need our help. The budget I am unveiling today will make significant strides in helping those Minnesotans stay afloat."
MN Management and Budget Commissioner Schowalter said the administration is using a variety of solutions to balance the budget while investing to build a better future for Minnesota. Specifically, he listed a number of solutions: carryover from the previous fiscal year; $1 billion from the budget reserve (leaving $847 million in the reserve); transferring $130 million to the general fund from the stadium reserve; and raises $1.6 billion in additional revenue. The IFO signed a coalition letter urging Gov. Walz to include progressive revenue increases as part of his budget proposal. You can read that letter here.
The additional revenue proposals include: expanding the working family tax credit, expanding the first tier of the individual income tax, establishing a 5th tier income tax for families with incomes over $1 million; $7 million for Angel Tax Credit; an increase on the capital gains tax and corporate franchise tax rate; and reinstating the estate tax exclusion.
Higher Education:
The Governor is recommending $61 million for campus responsiveness and stabilization, which provides Minnesota State campuses with the operating funds needed to continue offering high-quality, affordable higher education programs throughout the state. This funding would address increased expenses caused by the coronavirus pandemic and inflationary costs over the biennium.
The Governor is also recommending $2.5 million to address critical needs that stand in the way of college and university students pursuing and completing their educational programs. This proposal will fund an online mental health resource for students and an information hub to connect students to state and local resources to address basic needs, such as housing and food insecurity.
Walz is also proposing $35 million to the Minnesota Office of Higher Education for a workforce stabilization program. The program is for targeted grants that cover the full cost of tuition and fees and may be used at a public college or university for re-skilling and workforce stabilization. More details are included in the recorded legislative update. The program is intended to benefit approximately 20,300 students who are eligible for grants to cover tuition and fees based on their income or are working in an industry that has been impacted by COVID-19.
The Governor has also proposed $46.5 million additional funding for the University of Minnesota, $6 million for the State Grant Program, and $1 million for a direct admission program that will be coordinated with MinnState.
Walz also said they will readjust their budget after the February economic forecast is released. This is the first big step in the budget process. Both the House and Senate will now work to craft their budgets.
The complete details of the budget can be found on Minnesota Management and Budget's website.
Federal COVID Relief:
President Biden released a $1.9 trillion COVID relief package that includes $35 billion for higher education. That is significantly more than the $22 billion that was approved in December and the $12 billion that was approved in March. Watch for an IFO Action Alert in the near future to add your voice to the IFO's federal advocacy efforts.
Please let me know if you have any questions or comments at bohn@ifo.org.
Legislative Update: Gov. Walz Releases Budget Proposal