Gov. Tim Walz faces high budget demands in rural Minnesota

St. Cloud - Dairy farmer Mike Orbeck sat across the table from Gov. Tim Walz and told him, finances are tight. But if he made more money, he could lose his access to MinnesotaCare.

Walz, the first governor from greater Minnesota in nearly three decades, assured Orbeck and others gathered in a small conference room in St. Cloud on Thursday that he had a plan to expand public health care programs so people who earn more could use them. That's just one of the points he and Lt. Gov. Peggy Flanagan have highlighted as they tour the state — nine stops outside the metro this month alone — to tout a budget Walz calls "the single greatest investment in Greater Minnesota in the history of our state."

The $49.5 billion two-year spending proposal contains a number of pieces rural and greater Minnesota advocates have demanded. It would invest $70 million in rural broadband expansion. Local governments and counties would get $30 million more each year. Farmers would get $50 an acre in tax credits to help offset the expense of adding buffer strips along waterways.

After the St. Cloud meeting of farmers, lawyers and community development workers, people who attended said they felt a kinship with Walz, a longtime Mankato resident who previously represented a large swath of southern Minnesota in Congress.

"We're all taxpayers in Minnesota, whether you live on Hennepin Avenue or you live in Thief River Falls," said Carol Anderson, executive director of Community Development Morrison County, who was at Thursday's meeting. "At least we've got somebody's who is listening to us. … He is trying to bridge that rural-urban divide."

But some greater Minnesota residents see pitfalls in his plan. Child-care providers said investment in prekindergarten will have negative consequences for their already strained industry. Many rural drivers fear a 20-cent gas tax proposal could hit them harder as they drive longer distances. Twenty cents is too steep, but members of the agriculture industry are open to a more modest increase, said Tamara Nelsen, Minnesota AgriGrowth Council executive director.

Anderson, who lives on a farm in Benton County, drives 64 miles a day for work but said the gas tax increase is necessary. She hopes lawmakers agree to put more money toward roads, bridges and wastewater systems outside the metro.

Those would be some of the priorities in a separate $1.3 billion infrastructure borrowing plan Walz proposed. Of that proposal, 22 percent of the dollars would go to greater Minnesota, 27 percent to the Twin Cities metro and 51 percent for statewide projects.

For Republican legislators, Walz's vision is just too much taxation, too much spending.

They have firmly opposed such a large borrowing bill and the governor's public health care buy-in plan, called ONECare. But some of Walz's rural initiatives overlap with Republican priorities, said Senate Majority Leader Paul Gazelka, R-Nisswa.

"We're going to be supportive of broadband. And I believe we'll get to some sort of agreement on local government aid," he said.

He said he appreciated that Walz is looking for ways to support farmers, but suggested the state examine ways to cut regulations as well.

People outside the Twin Cities often feel their communities are being overlooked, said Julie Tesch, president of the Center for Rural Policy and Development. The data show that financially that's not always the case, particularly on transportation.

Nonpartisan House Research staff reported in 2014 that the seven-county metro area generates about 64 percent of the state's tax revenue but gets 53 percent of major state aid. When it comes transportation money, greater Minnesota has typically gotten far more than the metro, according to a 2017 Star Tribune analysis.

Walz headed to St. Cloud on Thursday in part to combat that perception that greater Minnesota is overlooked. On the trip, he also talked with CentraCare Health executives about continuing a tax on health care providers, an idea the company's president, Ken Holmen supported.

The touring and focus outside the Twin Cities could have political benefits.

Democratic lawmakers have lost ground in rural communities in recent elections. The 2020 legislative races could determine what policies Walz is able to pass. The governor said many Minnesotans have already made up their minds for or against Democrats.

"My hope is, though, that they at least get better roads, better schools, property tax reductions," Walz said. "And if they start to make that connection that, 'You know what, this ideology does work better for us.' They'll probably start voting that way."

On the education leg of his budget tour, he stopped in the same Mankato West High School classroom where he once taught. Students talked with him about teacher diversity and he discussed his goal of significantly increasing education funding. That would help combat geographic disparities in school funding, he said, and he hopes to prevent districts from having to rely on referendums.

"Rural does not mean any longer 'Leave It to Beaver'-land or Mayberry," said Bemidji Area Schools Superintendent Tim Lutz, whose district also had a visit from Walz. He said the governor understands the poverty and lack of resources with which rural schools must contend. But he is worried the recent gloomier economic forecast could dampen what Walz can achieve.

For many communities around Minnesota, workforce-related concerns are a common theme as businesses try to attract and keep workers. The lack of affordable child care and housing are frequently noted, along with the need for better broadband.

To address the demand for more housing, Walz included an unusual $150 million investment for affordable homes statewide in his borrowing package. His $70 million broadband expansion plan would be a big step to get all rural homes sufficient internet, said Judy Erickson, spokeswoman for the MN Rural Broadband Coalition, adding, "It's not a want. It's a need."

While investments in greater Minnesota are essential, the message the governor sends is also important, Tesch said. She, like many young people, left a small Minnesota town to go to college, then lived in cities. But she recently moved back to a more rural community and said state leaders need to emphasize the opportunities and strong community ties that can be found outside the metro.

"The governor does a good job of talking about that and promoting that," she said.

Jessie Van Berkel • 651-925-5044