New Minnesota budget targets include $3 billion for tax cuts

ST. PAUL, Minn. (AP) — Democratic legislative leaders and Gov. Tim Walz agreed Tuesday on broad budget targets that add up to nearly $17.9 billion in new spending, including $3 billion for tax cuts, but the details of where the money will go remain to be negotiated.

Agreeing on the targets was a necessary step so that legislators can begin work in earnest on setting a balanced state budget for the next two years.

The agreement does not specify how they’ll cut taxes by $3 billion out of the state’s $17.5 billion budget surplus. House Speaker Melissa Hortman, of Brooklyn Park, indicated she has softened on the governor’s proposal for direct tax rebate checks, saying there’s “definitely room” for “nice-sized checks” in the targets and there’s a “commitment to do something” about taxation of Social Security.

Republicans, whose influence is limited this session, have pushed for full elimination of the state’s partial income tax on Social Security benefits. Some Democrats who won in tough districts and helped their party take control of the Senate and keep the House support elimination as well.

Other highlights include:

— $2.2 billion in new spending for K-12 education and pre-kindergarten — $1.2 billion for children and families — $100 million for broadband expansion — $1 billion for housing — $255 million for energy and climate — $650 million for public safety, — $2.3 billion for infrastructure projects — $40 million for disaster relief in anticipation of significant spring flooding.

Republican leaders said the targets include too much spending and not enough tax relief.

“Today’s budget targets are a reflection of how Democrats have become all too comfortable with their one-party rule,” House Republican Minority Leader Lisa Demuth, of Cold Spring, said in a statement. “Instead of listening to Minnesotans and proposing a responsible budget with meaningful tax relief, Democrats are going on a spending spree.”

Senate Republicans last week blocked a $1.9 billion public infrastructure borrowing package known as a bonding bill. The $2.3 million target for infrastructure would be an “all-cash bonding bill” that wouldn’t require GOP votes to achieve the three-fifths supermajority to approve borrowing.

Senate President Bobby Joe Champion, of Minneapolis, said the infrastructure target ensures that the Legislature can deliver on a “robust” capital investment bill, with or without GOP support.