Gov. Walz's tax plan harks back to 'Jesse checks' days

State finances were billions in the black and the first-term governor wanted to give some of that money back to taxpayers in direct tax rebate checks.

But first, he had to convince a divided Legislature to back the idea.

That governor was former pro wrestler Jesse Ventura, who became famous for the one-time payments he handed out that were eventually called "Jesse checks."

Memories of that time came flooding back for some Minnesotans this month when DFL Gov. Tim Walz rolled out his supplemental budget plan, proposing to use $700 million of the state's historic $7.7 billion budget surplus in one-time tax rebates to millions of Minnesotans. The name: "Walz checks."

"Minnesotans want to see results. They want to see things that make sense," said Walz. "They want this surplus to come to their pockets, make their lives easier."

If passed, Walz's rebates would come in at $175 for single tax filers earning up to $164,400 and $350 for married couples who file jointly and make $273,470 or less. State officials estimate 2.7 million households would qualify.

There are differences from what Ventura did. Walz's plan is based on income, while Ventura sent the surplus back to Minnesotans in the form of a sales tax rebate. The rebates were handed out three years in a row. In 2000, those checks were roughly $600 per person.

But both plans got immediate pushback from Republicans in the Legislature. In 1999, the DFL-led Senate and Republican-controlled House ultimately went along with a version of Ventura's plan, but Republicans preferred permanent tax cuts.

"Sooner we find a compromise on the rebate, the sooner we can talk about a real permanent tax cut for every Minnesota family," then-House Speaker Steve Sviggum said at the time.

This year, Republican Senate Majority Leader Jeremy Miller quickly blasted Walz's plan as an "election year gimmick." "We'll propose permanent, ongoing, targeted tax relief for working Minnesotans so they see savings every single year," said Miller, R-Winona.

There's trouble in branding things. After three years of tax rebates, the 2002 legislative session opened up with a nearly $2 billion budget deficit. Legislators were quick to name that the "Ventura deficit."

"The Jesse checks didn't cause the recession that came after, but the budget deficit was worse because of the tax cutting that was done during that time," said Nan Madden, who was early in her career at the progressive nonprofit Minnesota Budget Project when Ventura was governor.

But the toll of the COVID-19 pandemic makes what lawmakers do now even more significant, she said.

"Policymakers should be looking at what investments make families better off in the long term and really recognizing that this COVID-related recession was the most unequal in modern history," she said. "Lots of folks struggled, especially low income folks and people of color."