No tax hikes this session

On May 17, the Minnesota legislature announced that it had agreed on a $52 billion budget for the next biennium. As reported by the Star Tribune,

The leaders of the Minnesota Legislature and Democratic Gov. Tim Walz announced a $52 billion deal for the state’s next two-year budget on Monday, but lawmakers will have to finish the work next month and difficult negotiations still lie ahead on police accountability and other policy issues.

The agreement calls for a balanced two-year budget without raising taxes, while fully exempting from state taxes federal Paycheck Protection Program loans to businesses and unemployment insurance benefits that were raised during the pandemic. It also includes extra money for summer school to help students catch up after a year of distance learning.

“Minnesota did it again. We found commonality amongst ourselves,” Walz said at a news conference called to announce the deal, which was reached at about 12:15 a.m.

American Experiment has consistently pointed out that taxes are already high in Minnesota. The rich pay a disproportionate share of the state’s income taxes, and spending is at its highest level in history. Additionally, Minnesota is also receiving billions in federal aid, and tax collections have been higher than anticipated.

For all the reasons above, the legislature should have focused on lowering the tax burden instead of raising taxes further.