Walz Proposes $250 Million in Cuts for 2028-2029

The revised budget introduces approximately $250 million in cuts targeting the 2028-2029 biennium. These cuts are implemented through the reduction or complete elimination of several programs and grants spanning state government.Key areas impacted include:

• Facilities maintenance funding for charter schools.
• reduced aid for transit systems in greater Minnesota, potentially affecting rural communities’ access to transportation.
• Elimination of a state tax rebate program for political contributions, impacting campaign finance and individual donor incentives.

These cuts reflect a strategic effort to streamline spending and prioritize core government functions. Though, they also raise concerns about the potential impact on vital services and programs.

Additional Cuts to 2026-2027 Budget

Beyond the 2028-2029 biennium, Governor Walz’s updated proposal includes $162 million in cuts to the 2026-2027 budget. This necessitates careful consideration and negotiation between the governor and state lawmakers, who are tasked with crafting the budget in the coming months. These cuts will likely involve arduous choices and trade-offs across various sectors.

Shrinking Surplus and Growing Deficit: the Underlying Economic Reality

The impetus for these budget revisions stems from a less optimistic economic outlook. In early March, state budget officials announced that Minnesota’s projected surplus for the next two years had dwindled to $456 million. Concurrently, the anticipated deficit for the 2028-2029 biennium has increased from $5.1 billion to $6 billion. This shift reflects a complex interplay of factors, including national economic trends, state revenue projections, and ongoing spending commitments.

“By addressing the budget challenges we face today, we’re setting Minnesota up for long-term success and protecting the resources necessary to make Minnesota the best state to live, work, and raise a family,”

Gov.Tim Walz

Governor Walz’s statement underscores the management’s commitment to fiscal responsibility and long-term economic stability for the state. However, the path to achieving this goal will require careful planning and collaboration across the political spectrum.

Republican Criticism and Law Enforcement Funding

The proposed budget has already drawn criticism from Republican lawmakers, especially regarding the allocation of funds for law enforcement. Republicans have expressed concern over the initial exclusion of $6 million in law enforcement funding from the governor’s original two-year budget plan. This issue highlights ongoing debates about public safety priorities and the role of state government in supporting local law enforcement agencies.

The Big Picture: A $66 Billion Proposal

Walz’s budget proposal totals roughly $66 billion over the two-year period, leaving an estimated $2 billion “on the bottom line.” However, the projected deficit in subsequent years necessitates careful consideration of spending priorities and potential revenue enhancements. The budget reflects a complex balancing act between meeting current needs and ensuring long-term fiscal sustainability. This approach mirrors similar budgetary challenges faced by states across the country, from California to New York. For example, California is grappling with ways to address its deficit. One consideration is to tap into the reserve accounts.