ST. PAUL – Gov. Tim Walz released his budget proposal for the 2020-21 biennium on Tuesday, highlighted by more than $3 billion in tax increases over the next two years alone, and $4.7 billion in tax increases for 2022-23.
The governor’s proposal would raise Minnesota’s gas tax by 20 cents – a 70-percent increase – vaulting Minnesota’s gas tax to fourth-highest in the nation.
“The governor’s proposed budget is bad news for Greater Minnesota and low- to middle-income earners in general,” said Rep. Bud Nornes, R-Fergus Falls. “Just two years ago House Republicans used common sense in providing a historic investment in roads and bridges without raising taxes. Instead of taking those good ideas and running with them, the governor is pushing to raise the gas tax by 70 percent, making Minnesota’s gas tax one of the nation’s most expensive.”
The governor’s plan also includes increases to tab fees, the motor vehicle sales tax, the metro area sales tax, business taxes, and reinstatement of the sick tax, which is set to expire at the end of the year, adding $1 billion to the cost of health care for Minnesotans over the next two years.
In 2020-21, the governor’s budget raises general fund tax revenue by $1.2 billion. The extension of the sick tax adds an additional $947 million, with transportation-related taxes adding $907 million for a total tax increase of $3.1 billion. In 2022-23, the tax increases balloon dramatically; the governor increases general fund tax revenue by $1.4 billion, with another $1.5 billion for the sick tax and $1.7 billion in transportation taxes.