Capitol Watch: Walz pettiness over budget surplus
Governor Tim Walz received some very good news this week when they announced the state budget survived the 2023 legislative session and in fact is still delivering more money than…
No one should be surprised about the impending state budget deficit. Even though the state enjoyed a $17.6 billion surplus just months ago, Gov. Tim Walz and his allies in the DFL legislature did not change any of the fundamentals driving state spending. For the next budget, revenues are projected to be $63.9 billion while expenditures will be $66.2 billion, a $2.3 billion gap. The two largest and fastest growing parts of the state budget are K-12 education and human services and together they account for 70% of the entire general fund. If you attended one of American Experiment’s Off the Cliff presentations this summer, you will recognize this warning about spending:
Walz dumped $2 billion of the surplus into K-12 schools, most of it eaten up with new teacher contract settlements. The legislature did nothing to stop the massive growth in human services spending, which is now driving most of the projected $2.3 billion deficit for 2026-27. Again, this spending growth was not a surprise.
Gov. Walz took the podium after his budget team presented the numbers and insulted our intelligence with three rhetorical tricks.
First, he attempted a language trick that even the lapdog Minnesota press didn’t buy. Walz and his team at Minnesota Management and Budget tried to characterize the coming deficit as a “structural imbalance.” Several reporters repeated the question to MMB Commissioner Erin Campbell, “So you’re not calling this a deficit in 2026-27?” Walz quickly mixed up the talking points when he took the podium calling it a “structural deficit.” Whoops.
Walz next tried to roll out his fiscal conservative bona fides, awkwardly boasting of his 850 personal credit rating, a great accomplishment considering the taxpayers pay for his house and car. He then did what all Democratic leaders do at budget announcements in December: he urged caution. “Be measured,” he said, repeatedly. What has Tim Walz ever done regarding state budgeting that makes us believe he will be measured? He spent the entire $17.6 billion surplus, raised taxes an additional $9 billion, added thousands of new state government employees and allowed every part of the budget to grow.
For his last trick, Walz came out strongly against a straw man argument he made up for his Republican opponents. When asked how he would cut spending to avoid the deficit, Walz answered, “I’ll tell you what I’m not willing to do, I’m not going to give billionaires tax cuts to do this. And I’m certainly not going to take food out of the mouths of children.” Wait, what? Who is talking about tax cuts for billionaires or taking food out of children’s mouths? Nobody. Republicans hadn’t even issued a statement at this point. Rep. Kristin Robbins (R-Maple Grove) later pointed out the irony of his statement by explaining how Walz’s free school lunch plan is more of a tax cut to the wealthy than anything currently proposed by Republicans.
Speaking of free lunches, one of the reasons for the impending deficit is that their cost estimates for this program were way off. That’s hard to understand because the new law gives free lunch and breakfast to every student, no matter their income. Don’t we know how many students are in K-12 schools? Also, because this program was funded using current federal funds targeted to students who qualified for free and reduced priced lunch, the legislature will have to revisit the funding source in the 2024 session.
Another surprise tax increase
In other Capitol news, the IRS announced this week that Minnesota’s tax rebate checks WILL be subject to federal income taxes. Walz promised his
$2000 $260 rebates would be tax free since the IRS did not tax similar rebates from other states. Sorry! Another tax increase brought to you by the gang that can’t shoot straight. Why do their mistakes always cost us more money?
Walz called the IRS action “bullshit” at his press conference, causing a buzz in the press corps. This is another trick. He’s trying to cover up his mistake by sounding really upset, like he’s on our side against those bureaucrats at the IRS. Maybe he’ll send a strongly worded letter on our behalf to the IRS. Don’t hold your breath.
Watch for more Capitol Watch reports as we head toward the 2024 legislative session which begins February 12, 2024.
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