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, vaulting the state gas tax to fourth-highest in the nation.
“The thing that stands out most to me is the governor is looking to raise our gas tax by 70 percent,” said Rep. Paul Anderson, R-Starbuck. “This is very concerning to me and it would prove to be very costly to people in Greater Minnesota, especially those with lower incomes. This impact would not only be felt at the pump, but also through increased costs for goods and services that incur transportation costs – especially those related to the ag. industry.”
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.
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