Budget Deal Outline Established!
Big News on the Budget Front. The details have yet to be ironed out, but the Minnesota Reformer is reporting that an accord has been reached between Governor Walz and legislative leadership on the parameters of the budget deal for the 2022 legislative session. As it sits right now, the agreement stipulates that the target for new spending is $4 billion, the target for tax cuts is $4 billion, and $4 billion will be left on the table for the next biennium. The figures include budget “tails” that need to be accounted for in the next biennium. In other words, the spending for the coming fiscal year will be lower than the amount cited in the deal. For instance, the FY 23 (the 2022-2023 school year) spending for education appears to be set at $300 million. Because it will be perrmanent spending, that number grows in the FY 24-25 biennium to $700 million for a total spending target of $1 billion.
On the tax side, there’s hopefully room for some equalization. The House does dramatically increase the equalizing factor on the first tier of the local option revenue, but given that there will be a healthy target for the tax conference committee to configure into various tax policies and a greater commitment to equalization should be part of that discussion.
This is only the beginning of what should be a hectic final week at the Legislature. There will be a lot of wrangling across conference committees to fill in the details of how money should be allocated to different programs. So as Bette Davis uttered in her famous line in the classic All About Eve, “Fasten your seatbelts, it’s going to be a bumpy night.” Or in this case, a bumpy seven days until the Legislature adjourns on May 23.
Here is the article from the Minnesota Reformer: Lawmakers, Walz have a deal on taxes, spending