This browser does not support the Video element.
Gov. Walz proposes social media tax in budget
Gov. Tim Walz has released his 2026 supplemental budget proposal, focusing on lowering costs for middle-class families and maintaining a balanced budget through responsible spending cuts.
ST. PAUL, Minn. (FOX 9) - Gov. Tim Walz is calling for a $370 million cut in spending while proposing funding to expand the Dependent Care Tax Credit, responding to the ICE surge, and dealing with fraud.
Budget proposal
What we know:
The governor's proposal calls for:
- An increase to the Dependent Care Tax Credit that would increase the maximum allowable expenses by $3,000 for one child or $6,000 for two or more under the age of 5.
- Cutting the statewide sales tax by .075% – the first sales tax cut in state history.
- Create a council on future AI economy
- Implement a social media tax on tech companies
Responding to ICE surge
- Rental support in response to the ICE surge
- Small business loans to support businesses affected by the ICE surge
- Create a $10 million fund for the state to respond to future impacts from the surge
Gun safety
- Assault weapons ban
- Close ghost gun loophole
- Enhance capitol security
- Increase mental health resources and school resources
- Increase penalties for impersonating a police officer
Minnesota fraud response
- Increase fraud detection
- Update Minnesota's outdated legacy IT systems for the Department of Human Services
- Increasing staffing in the Attorney General's Medicaid Fraud Unit.
Cost reduction
By the numbers:
The proposal overall would cut spending by $370 million in state spending in the 2029 fiscal year, which the governor's office says reduces the structural deficit by nearly 20%.
The governor says that would leave the state with a project balance of $1.8 billion on the bottom line in the fiscal year 2028-29.
What they're saying:
Gov. Walz touted his efforts to balance the budget while presenting his supplemental proposal.
"Unlike the federal government, we are required to balance our budgets," the governor said. "And unlike the federal government, Minnesota has invested in the things that will continue to grow our economy."
"We have over $3.7 billion that we will leave on the bottom line in our first biennium and nearly $800 million in the second," Gov. Walz added. "Doing so means that we do have to make some tough choices, and that means those choices of investing in the things that grow our economy in the future."