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Walz bumps up proposed direct payments to $500 per Minnesotan, $1,000 for couples

The governor on Thursday said the state's overabundance of taxpayer funds could help pay for several proposals, including direct checks back to Minnesotans.

Gov. Tim Walz - Walz checks
Gov. Tim Walz and Lt. Gov. Peggy Flanagan on Thursday, March 17, 2022, speaks to journalists outside a Holiday gas station in New Hope, Minnesota, about his supplemental budget plan.
Dana Ferguson / Forum News Service
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NEW HOPE, Minn. — Gov. Tim Walz on Thursday, March 17, rolled out a fuller version of his proposed plan for the state's $9.25 billion budget surplus, including $500 checks for Minnesotans.

After state budget experts last month announced that Minnesota continued to bring in more money in taxes and fees than previously expected, the DFL governor bumped up proposed direct payments to taxpayers.

Under his plan, Minnesotans who make up to $164,400 would be eligible for a $500 check; couples filing jointly could receive $1,000 if they earn $273,470 or less. About 2.7 million people in the state could benefit from the direct payments.

Walz previously proposed $175 payments to individuals and $350 to couples before budget experts predicted that state revenue was set to come in $1.5 billion higher than previously expected.

The plan isn't a sure thing since it needs to pick up support from both Republicans and Democrats in the Legislature to pass and be signed into law.

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Outside a Holiday gas station in a Twin Cities suburb, Walz said the payments for front-line workers and repayment of the state's unemployment insurance trust fund should also be funded with state budget surplus dollars.

With an overabundance of resources, the state should be able to fund several top priorities, he said.

“We see our economy, even in a time of turmoil, being resilient and one of the best things we can do for the economy and for families is put money into their pockets right now,” Walz said. "It would make a difference at the pump, it would make a difference at the grocery store."

The governor also proposed spending $70 million to pay for a 2.5% cost of living increase for Minnesotans on the state's public pension plans, $70.5 billion to boost the state's public health systems, $153 million more to recruit and retain caregivers and $20 million in grants to help communities recover from the pandemic.

The new proposals come on top of a handful of other supplemental budget provisions the Walz administration recommended for child care, education and professional opportunities and public safety. Lawmakers last year approved a $52 billion two-year budget last year and they don't have to spend the historic surplus in 2022.

And it wasn't clear this week that the divided Legislature could agree on how to spend the extra $9.25 billion.

Business owners around the state this week saw payroll taxes hiked Tuesday as a result of legislative leaders' inability to compromise. And negotiations over refilling the state's unemployment trust fund and paying $1,500 checks to front-line workers remained ongoing Thursday.

Republicans at the Capitol said they would consider Walz's direct check idea but preferred permanent ongoing tax relief over one-time payments. They've set out proposals decreasing Minnesota's first-tier income tax and eliminating the tax on social security benefits.

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“We will consider any proposals to put money back into people’s pockets,” Senate Majority Leader Jeremy Miller, R-Winona, told reporters. “We are very focused on giving money back to the people of Minnesota.”

Democrats at the Capitol, meanwhile, have prioritized $1,500 payments for front-line workers who stayed on during the pandemic, a new paid family leave program and additional funding for education and child care programs.

MORE FROM DANA FERGUSON:

Follow Dana Ferguson on Twitter  @bydanaferguson , call 651-290-0707 or email  dferguson@forumcomm.com.

Dana Ferguson is a Minnesota Capitol Correspondent for Forum News Service. Ferguson has covered state government and political stories since she joined the news service in 2018, reporting on the state's response to the COVID-19 pandemic, the divided Statehouse and the 2020 election.
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