Minnesota Gov. Tim Walz rolled out his revised budget proposal on Friday morning, pitching $409 million in additional cuts over four years.
Walz released a revised budget proposal for 2026-27 totaling roughly $66 billion, with new pockets for spending cuts. The plan leaves $2.3 billion in surplus for 2026-27 and $342 million in surplus for 2028-29.
A separate proposal Walz presented on Jan. 17 also carried $66 billion in total expenditures and had a budgeted surplus of $2.1 billion for 2026-27 and $355 million for 2028-29.
Walz’s revised proposal includes an additional $162 million in cuts for 2026-27 and $247 million more in cuts for 2028-29. Some of the cuts added for 2026-27 include $21 million for special education charter adjustments, $20 million for long-term charter facility maintenance, $16 million for Greater Minnesota transportation and $16.5 million for payments in lieu of taxes, which would help compensate for local property tax losses outside of assessments to public land.
For the $247 million in proposed cuts for 2028-29, $26 million came from special education charter adjustments and $22 million from long-term charter facility maintenance. Walz also proposed $15 million in reductions for school library aid and $8 million for the political contribution fund.
Walz’s new proposal also includes some of the same cuts he proposed in January: $1.3 billion to disability waiver costs over four years and a 5% cut in spending for special education transportation reimbursement.
Walz’s cuts generally target some of the departments where the state is projected to spend most of its money in 2026-27. The projected expenses for Health and Human Services total $26 billion and Education expenses are estimated at $24 billion, according to Minnesota Management and Budget’s February forecast.
The revised budget also maintains a proposal from January for the state’s first-ever sales tax of 0.075%, or 7.5 cents per $100. Walz is also proposing increasing the current surcharge on health maintenance organizations from 0.6% to 1.25% of total premium revenue.
The revised budget adds $4 million for the Emergency Agricultural Emergency Account and $2 million in one-time spending for the Philando Castile Memorial Training Fund for police officer training.
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“This budget is fiscally responsible and prioritizes the programs that will set Minnesotans up for success for generations to come,” Walz said in a news release. “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.”
Walz and lawmakers have a $546 million surplus to work with as they craft the 2026-27 budget, and officials project a $6 billion projected deficit for 2028-29. During the Legislature’s budget session in 2023, Minnesota was working with an $18 billion surplus and approved a budget of $72 billion, a jump from the previous $52 billion budget.
Lawmakers’ budget targets are due on April 1 for the House and April 5 for the Senate, Senate Majority Leader Erin Murphy, DFL-St. Paul, and Melissa Hortman, DFL-Brooklyn Park, said at a February forecast review. The Legislature must pass a budget by May 19 to avoid a special session.
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