Minnesota Budget Agreement Won't Include Gas Tax Increase

SAINT PAUL, MN — Minnesota Gov. Tim Walz and state lawmakers agreed to a budget Sunday night, avoiding a potential government shutdown. Walz and House Democrats agreed to drop the proposed 20 cent per gallon increase in the gas tax, tab fee increases and sales taxes to pay for public transit.

For education, lawmakers say the budget deal includes enough new funding for a 2 percent increase to the per student formula for each of the next two years.

"Minnesota House DFLers are committed to building a Minnesota that works better for everyone," DFL House Speaker Melissa Hortman said in a statement.

"We reached a bipartisan budget agreement with Governor Walz and Senate Republicans that provides strong funding for education and secures health care for more than one million Minnesotans. While the budget agreement does not contain everything we would have liked, we worked together and achieved a compromise that is in the best interests of Minnesotans."

Republican Senate Majority Leader Paul Gazelka praised the budget agreement for excluding the gas tax, saying that, "stopping the gas tax increase was one of our top priorities and I’m pleased Gov. Walz and House Democrats ultimately listened to the people of Minnesota and rejected this approach."

According to a news release from Senate Republicans, the budget will also include the first income tax cut for the middle class in nearly 20 years. A rate cut of .25 percent to the second-tier income tax bracket takes it from 7.05 percent down to 6.8 percent beginning in tax year 2022.

"Minnesota is finally going to see income taxes go down for the first time in 20 years," said Gazelka.

Walz, who was elected governor last year, said overall the budget agreement was a good first step in his vision for Minnesota:

"In one of the only divided governments in the country, I am proud that we came together across party lines to put together a budget that will improve the lives of Minnesotans," he said.

"While compromise means everyone doesn’t get everything they want, this budget allows for meaningful investments in education, health care, and community prosperity. We set out to show Minnesotans that divided government can work. Now I want to set out to show them we can do it better."

"Spoken as a coach, this first quarter is a step toward the bold vision I outlined for Minnesota," Walz continued.

"To the millions of Minnesotans who believe we can lead the way in education and healthcare, know this: we will be scoring touchdowns by halftime."

Walz also joked on Twitter that they finalized the budget agreement just in time for the Game of Thrones series finale Sunday night.