Walz trims state budget proposal by $121 million

ST. PAUL, Minn. (FOX 9) - Gov. Tim Walz trimmed $121 million out of his nearly $50 million budget proposal Friday in response to a slowing economy and shrinking surplus.

Despite the cuts, Walz left his biggest and most controversial ideas in place. That includes a 20-cent per gallon gas tax increase to pay for road improvements and a restoration of the 2 percent tax on medical providers to maintain health care programs.

“I think my initial proposal was thought out, it wasn’t pie in the sky,” Gov. Walz told reporters during a news conference.

Walz said he cut $131 million out of his initial proposal, offsetting it somewhat by adding $37 million in new spending. Among the cuts he outlined Friday: less spending on Department of Natural Resources trails and a slightly smaller pay raise for judges.

Walz said the changes were only reductions from his initial spending plan. No agencies are suffering budget cuts from their current allocations, he said.

Republican state Sen. Julie Rosen, who chairs the powerful Senate Finance Committee, wasn't impressed by the cuts.

“When he first started with $3.5 billion in new taxes and fees, I don’t think (the cuts) are much,” said Rosen, R-Vernon Center.

Walz says he started the belt-tightening in his own office. Gone is a new unit he sought to do constituent outreach. The $700,000 proposal became a punching bag for Republicans, who said it amounted to government bloat.

“I hope this shows them that yes, I’m willing to take things off,” said Walz. “They haven’t even put out their budget yet and I’ve already cut back.” 

“That was not a give,” said Rosen. “That should have been a nonstarter right from the very beginning. He needs to live within his means.”

Walz says that's been the Republican response to all his proposals: no.

This week, he started taking the fight to GOP parts of the state to explain what road projects a gas tax hike would fund.

“Some of my, I guess, aggressiveness in getting out there is at some point (Republicans) are going to have to move a little bit,” said Walz.

Rosen said the governor's negotiating tactics were head-scratching.

“Why not just step back, let us do our work, we’ll get together after Easter and we’ll figure this out,” said Rosen.

House Democrats are scheduled to release their budget plans Monday. Senate Republicans will follow with their plan next Friday. 

Divided government adds a new layer of challenges this year as lawmakers try to meet budget deadlines later this spring.