Walz 10-year economic plan calls for childcare credits, out-of-state marketing

Minnesota Gov. Tim Walz and members of his cabinet visited a sheet metal fabricator in the north Metro on Wednesday to release an economic plan that calls for improving access to childcare and growing the job market over the next decade.

The proposal, put forward by the governor's economic council, seeks an expansion of childcare credits, millions of dollars for recruiting out-of-state companies and workers, and spending additional money on the state's transportation needs. Walz did not put a total dollar amount on implementing the plan, which would require buy-in from the state Legislature.

At the same time, Walz renewed his call for $1,000 rebate checks for most Minnesota adults. He and lawmakers have not agreed to hold a special session for direct payments despite months of debate.

"I keep hearing, 'It’s a gimmick you want to give back money,'" Walz told reporters. "Ok, I’ll go to that logic. It’s a gimmick to not give back the money. So, I’ll let Minnesotans decide: which gimmick would you like? To not have any relief for the current situation or to have that to make a difference?"

As Walz promoted the economic plan, the Federal Reserve raised benchmark interest rates by an additional three-quarters of a point for a second straight month in an effort to curb rampant inflation, which at 9.1% in June was the highest since 1981.

Inflation is a potent political issue, but so is the potential for a recession caused by the Fed's tightening. The Fed's actions will slow the economy by making it more expensive to take out a loan. The central bank is betting that it can bring down inflation without a recession and the job losses that economic slowdowns historically cause.

In Minnesota, the 1.8% unemployment rate in June was the lowest for any state in the history of recordkeeping, which dates to 1976. But job growth has slowed in recent months and was flat in June.

Walz's presumptive Republican opponent, Dr. Scott Jensen, said the governor's economic plan lacked short-term solutions for price increases.

"What struck me most about Gov. Walz’s 28-page economic plan is that it didn’t mention the words 'inflation,' 'gas prices,' or 'utility costs' once," Jensen said in an emailed statement. "Gov. Walz proved once again he’s tone deaf to the plight of working Minnesota families and isn’t up to the task of leading in the moment."

Transportation costs, gas taxes

The Walz economic plan includes a section on transportation that says the state must "provide sustainable, long-term revenue and encourage a dedicated local option for transportation taxes, recognizing that federal assistance may be limited and other state and local funds are required."

In 2019, Walz pushed for a 20-cent gas tax increase. The latest plan does not call for that specifically.

""No, no, no," Walz said when asked if he's advocating for a gas tax increase now. He said his 2019 gas tax proposal came before Congress passed a massive infrastructure package in 2021 that delivers new transportation money to states. "The federal infrastructure package is the equivalent of a 30-cent increase in spending that we were able to get from it. So, we feel like we’re in a solid place."

Walz has called on Congress to suspend the federal gas tax of 18 cents per gallon. Jensen has advocated to suspend Minnesota's 28-cent per gallon gas tax, which would require other sources of funding to avoid budget cuts for road and bridge projects.

Jensen has previously advocated for eliminating the state's minimum markup law for gas, though his campaign has since removed that idea from its plan on gas prices.