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 state has enough tax revenue to improve roads and bridges without tax increases as long as we don’t waste it,” said Rep. Steve Green, R-Fosston. “We need to make roads and bridges the budget priority most of us agree it is, but the governor apparently is unwilling to do so without raising taxes that will disproportionately hurt lower-income people and residents of Greater Minnesota in general. Between throwing Line 3 back in court and proposing huge tax increases, this is a bad start for the Walz administration and he is creating a deeper divide between rural Minnesota and the Twin Cities.”
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.