The Minnesota House’s budget targets, released this week, tell us how lawmakers propose to allocate the state’s projected $1.1 billion surplus for FY 2020-21. The House’s “Minnesota Values Budget” makes substantial investments in education, as well as other budget areas, and includes a $1.5 bonding bill. The House targets also would raise additional revenues to support new investments, given the short-term nature of the projected surplus.
The targets are an important milestone in the budgeting process. They set the size of the House’s omnibus budget, tax, and bonding bills. Each legislative body sets their own targets, and the Senate is expected to announce their targets Thursday.
|House General Fund Targets (net changes)||FY 2020-21|
|Higher Education||$305 million|
|Capital Investment (debt service)||$142 million|
|Health and Human Services||$129 million|
|Public Safety||$121 million|
|State Government||$103 million|
|Greater Minnesota Economic Development||$100 million|
|Jobs and Economic Development||$84 million|
|Environment and Natural Resources||$33 million|
|Veterans and Military Affairs||$4.3 million|
|Energy and Climate||$2 million|
|Other Bills||$15 million|
|Taxes and Local Aids||$1.2 billion|
The largest proposed targets are in E-12 Education and Higher Education. House leadership indicated that this money would support all Minnesota students and freeze tuition at public higher education institutions. While the House targets are broadly similar to the priorities laid out in Governor Tim Walz’s budget proposal, this is one area where they go further.
The proposed targets describe the net changes to state general fund spending in each area, and could also reflect revenue increases or transfers between funds. For example, the -$425 million general fund target for Transportation should not be interpreted as calling for a $425 million cut in transportation funding. It likely reflects reducing the amount of general fund dollars going toward transportation and instead using the more traditional dedicated transportation funding sources. House Democrats announced that their Transportation target accounts for a phased-in 20-cent increase to the gas tax, similar to the governor’s proposal.
This budget plan raises general fund revenues as well. When House leadership announced their targets, they emphasized the need for sustainable funding to support quality schools, affordable health care, and economic security. While the details will be released in the next few weeks, they emphasized their tax bill would prioritize seniors, working families, and farmers – in contrast to the 2017 federal tax bill, which provided large, permanent tax cuts for corporations.
Stay tuned for more analysis of how the pieces of the budget bills come together.