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Legislative News and Views - Rep. Matt Grossell (R)

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Gov Walz's Budget: The Price is Wrong

Friday, February 22, 2019

Friends, 
 

This week, Governor Tim Walz released his budget proposal for the 2020-2021 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 2022-2023. His proposal would raise Minnesota's gas tax by twenty cents—a massive 70 percent increase—vaulting Minnesota's gas tax to 4th highest in the nation. It 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.

I am incredibly disappointed in the budget released by Governor Walz. Minnesotans are already over-taxed, as evidenced by the $1.5 billion budget surplus, and there is simply no reason to raise the gas tax by 70 percent giving Minnesota the 4th highest gas tax rate in the country. This, combined with a number of other tax increases, shows Democrats in Minnesota believe hard-working Minnesotans should turn over even more of their hard-earned money than they already do.  

In 2020-2021, the Governor's budget raises general fund tax revenue by $1.224 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 $3.078 billion. In 2022-2023, the tax increases balloon dramatically; the governor increases general fund tax revenue by $1.43 billion, with another $1.52 billion for the sick tax and $1.73 billion in transportation taxes. 

Governor Walz's plan also fails to extend reinsurance, which could cause rates to skyrocket once again by 50% or more on the individual market. Instead of extending reinsurance, the governor has proposed a 20% premium subsidy only for those who do not receive federal tax credits under the Affordable Care Act. The cost in calendar year 2020 of the 20% rebate is approximately $106 million, which would only impact about half the market. The 20 percent subsidy is twice as expensive than the state cost in calendar year 2020 of extending reinsurance, which would only cost approximately $54 million. The Governor's proposal would do nothing to prevent rates from skyrocketing, and would very likely mean that the administration is proposing to pay twice as much so Minnesotans can ultimately pay higher premiums on the individual market.

Stay in Touch

Please continue to stay in touch to share your thoughts or concerns. My phone number is 651-296-4265 or you can email me at rep.matt.grossell@house.mn.

Have a great weekend and God Bless! 

Matt

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