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 per gallon – a 70-percent increase – vaulting Minnesota’s gas tax to fourth-highest in the nation.
“It’s hard to fathom the governor is pushing for a 70-percent tax increase on a tax that hurts low-income citizens and those of us in Greater Minnesota the most,” said Rep. Joe McDonald, R-Delano. “We all agree our roads and bridges need improving, but the governor apparently is unwilling to do so unless he is able to take more tax dollars from Minnesotans. That is a shame. Two years ago, House Republicans proved we can make historic investments in roads and bridges without raising taxes by simply making transportation funding the budget priority most of us agree it is. The state already has enough of our tax dollars, they just need to be spent more wisely and with focus.”
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.