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.
“We Minnesotans are proud people and we like to see our state highly ranked on national lists,” said Rep. Dean Urdahl, R-Acton Township. “But the governor’s proposal to raise Minnesota’s gas tax by 70 percent would make ours the fourth most expensive in the nation and that is not something we should strive to achieve.
“The gas tax is a regressive tax that is felt by low- and middle-income families the most – especially here in Greater Minnesota. It also would increase the cost for an endless number of goods and services. Just two years ago we provided a historic investment in roads and bridges without raising the gas tax. I would rather pursue similar methods to uphold transportation as a priority instead of turning to tax increases.”
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.