Governor Announces First Segment of Supplemental Budget

January 24, 2022

The $4.7 billion package focuses on economic development and direct economic assistance for individuals and businesses.

With a current projected $7.7 billion surplus, Gov. Tim Walz announced the first part of his supplemental budget on Jan. 20. The $4.7 billion package focuses on economic development and direct economic assistance for individuals and businesses.

While the first segment of the supplemental budget proposal includes only a few items that impact cities, there are several items that will impact their residents and businesses. The governor will roll out more supplemental budget spending proposals, and many of those will have a more direct impact on cities.

Provisions in the proposal

Some specific items in the proposal include the following:

  • $1 billion would go out as $1,500 one-time payments to 667,000 front-line COVID-19 workers in health care, schools, day care, food service, transportation, long-term care, building services, public safety, retail, and manufacturing.
  • $170 million to complete border-to-border broadband implementation.
  • $2.73 billion to replenish the state Unemployment Insurance Trust Fund to prevent tax increases on business. It would also increase the child care tax credit maximum and income eligibility, expand the newborn tax credit, and increase eligibility for the E-12 education credit.
  • 7 million Minnesota households would receive “Walz Checks” in payments of $175 ($350 for married couples filing jointly) to distribute part of the projected surplus back to taxpayers.
  • $115 million to a new fund to help retain caregivers in the workforce with incentive bonuses, tuition reimbursement, and child care grants.
  • Funds to provide energy-efficiency improvements to permanently reduce energy costs by 20-30% for up to 7,000 homes through the Weatherization Assistance Program.
  • $17 million to finance the Angel Tax Credit program to drive development of high-tech, high-innovation companies.
  • $25 million to improve youth education opportunities for advanced classes and tech training; and
  • Other spending to help farmers and agricultural businesses to mitigate drought losses and improve meat-processing availability.

Lean more about the proposal from the governor’s press release

Legislature to consider proposal

The Legislature will debate the proposal during the 2022 session, which is expected to be very contentious. A major point of difference will be whether the surplus should be used as a one-time opportunity or as a basis for permanent tax and spending changes.

The League will follow this process and will continue to provide updates on proposals that impact cities.

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