Minnesota House Democrats present $52.5 billion budget plan

The state would spend hundreds of millions more on education and add a public health care option and paid leave program under the budget vision Minnesota House Democrats debuted on Tuesday.

The $52.5 billion proposal is larger than the plans Gov. Tim Walz and Senate Republicans rolled out last week. But all three lack a key piece: the estimated $2.6 billion in one-time money state government expects to get through the latest federal stimulus package.

House Democrats presented their big-picture goals for spending but did not delve into their tax proposal for the next two-year budget.

"Our budget will focus on helping those most impacted by COVID: students, workers, families and small businesses," said House Speaker Melissa Hortman, DFL-Brooklyn Park. "We're raising significant progressive revenue in this budget and making important ongoing investments in areas like education, health care and economic security."

House Democrats will present their tax plan the first week in April, said Tax Committee Chairman Paul Marquart, DFL-Dilworth. He said it will include tax cuts to small businesses that received forgivable loans through the federal Paycheck Protection Program (PPP) and individuals who got unemployment benefits.

"We're going to pay for that with progressive, ongoing revenue that's going to create more fairness and level the playing field," Marquart said.

Republicans have opposed any tax increases as the state is projected to have a $1.6 billion surplus. GOP leaders also urged the House DFL to take faster action Tuesday on PPP and unemployment insurance tax breaks.

"Instead of helping struggling workers and businesses, Democrats are prioritizing tax hikes and growing government," House Minority Leader Kurt Daudt, R-Crown, said in a statement. "Their budget targets are a fantasy, and their budget bills will be built on tax increases that will never happen."

Leaders of the divided Legislature and Walz, a Democrat, have now all offered budget frameworks, with Senate Republicans' plan totaling $51.9 billion and Walz's coming in at less than $52.3 billion.

House leaders said their budget Tuesday was in lockstep with Walz's in many areas. Hortman said while they have some different spending priorities in certain areas, like public safety, "We are very aligned in our values with the budget that the governor put forward on focusing on those populations that need our help the most."

Democratic leaders declined to say whether they, like Walz, want to create a fifth-tier income tax bracket for the state's top earners.

Last week, the governor altered his budget to reflect the state's brightening economic picture. He scaled back his plans to raise taxes on cigarettes, estates and corporations, although he maintained his push for a fifth tier. And he announced that he wants to expand tax breaks for working families, small business owners and renters.

Like the governor's, House Democrats' proposal also included $35 million for a so-called "SAFE Account." The proposal would help local governments cover the cost of receiving mutual aid from other law enforcement agencies during emergencies, such as the ongoing trial of former police officer Derek Chauvin in Minneapolis. The Senate passed a $20 million version of the account earlier this month.

However, Hortman said ever since the federal relief bill passed and devoted dollars to local governments, conservatives' appetite for such an account has faded. She said there is no "realistic path" for the bill to pass at this point.

"In a historically slow start to the session, the House has failed to pass any bills to support law enforcement, including blocking action on a SAFE compromise bill last week," Senate Majority Leader Paul Gazelka, R-East Gull Lake, countered in a statement, encouraging them to act on the Senate version.

Jessie Van Berkel • 651-925-5044