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ST. PAUL, Minn. (GRAY) – Minnesota Governor Tim Walz unveiled his supplemental budget proposal on Tuesday, a list of priorities he wants the legislature to tackle before they adjourn their session later this spring.
Walz is proposing several key changes to state policy and tax code. On policy, his proposal looks to address the impacts of Operation Metro Surge, tackle fraud, pass new gun control laws, and more.
Among the more fiscally impactful proposals, Walz is proposing an expansion of the state’s Child Tax Credit and a new tax on social media companies.
Currently, according to Minnesota Department of Revenue Commissioner Paul Marquardt, the maximum Child Tax Credit is $1,050 for one child and $2,100 for two or more. Walz’s proposal would raise those maximums to $3,000 and $6,000, respectively.
The threshold for who can receive the maximum credit would also be increased, allowing families earning up to $120,000 per year to take advantage of the program.
Marquardt estimates that the reworked Child Tax Credit would impact roughly 105,000 families and would equate to “about a $150 million tax cut every year.”
Walz’s added tax on large tech and social media companies would require them to pay a tax for collecting and selling consumer data. Estimates show the proposal could bring in hundreds of millions of dollars in added revenue.
In total, the governor’s proposal would increase spending in the current legislative biennium by $113 million, and would drive up revenue by roughly $50 million.
While those costs would mean more money spent than revenue created in this budget cycle, the calculus flips in the next two-year biennium; spending would increase by $189 million and revenue by $246 million.
The governor’s proposed budget would also make some spending reductions; namely, the proposal would cut spending to nursing homes and disability services. Walz feels the costs of such programs have ballooned in recent years.
“Minnesota is the most generous state in those areas, and we will continue to be the most generous state. I made the case last year and got bipartisan support in that,” said the governor, “We’re talking about trying to resize and make sure that these programs are as efficient as they can possibly be.”
The governor’s proposal is just that—only a proposal—until the legislature takes action on it. It’s possible some items will pass with ease, while others will face a steeper path.
Senate Minority Leader Mark Johnson (R-East Grand Forks) said Tuesday that there are elements in the budget that’ll be a tough ask for the GOP.
“I don’t see a pathway for this happening. You know, when you look at the net of what is being proposed—this is just briefly, as we go through it, we’ll refine the numbers—but it looks like a $868 million increase in taxes again, to Minnesotans," said Johnson.
It’s unclear what calculations Johnson’s estimate is based on, but the GOP seems firmly opposed to any tax increases at all, even those like the proposed tax on tech corporations. Even so, he didn’t immediately write off the possibility of working with Walz on modifying the Child Tax Credit.
Johnson’s mindset seems similar to House Ways and Means Committee Co-Chair Paul Torkelson (R-Hanska), who issued a statement on the budget on Tuesday.
“There are areas in the Governor’s budget where we can find common ground, including modernizing IT, federal conformity on Medicaid requirements, and an Office of Inspector General, and I hope Democrats will work with us to get those done. But new taxes on Minnesotans, especially ones that make it harder for low-income residents to access legal services, and cuts to nursing home providers will face strong resistance.”
The governor’s budget proposal comes just over a week before legislative committee deadlines will arrive. By that date, all bills must have been “acted upon favorably” by all relevant committees to continue advancing.
Several of the governor’s proposed bills had already been made into bills in 2025, but failed to get the support needed to pass.
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