Commissioner Critiques Governor's Tax Increase Proposal in Minnesota

The Minnesota Legislature's Committee on Taxes convened on March 25, 2025, to discuss a controversial tax increase proposal put forth by Governor Walz. The meeting featured a critical examination of the proposal, particularly its implications for sales and property taxes.

A key point raised during the discussion was the assertion that the proposal, initially framed as a tax cut, would actually result in a significant tax increase. One committee member highlighted that the sales tax increase could add approximately $400 million per biennium, leading to a net tax increase of around $200 million. Additionally, the proposal was noted to potentially raise property taxes by 4.1%, further burdening Minnesota residents.

Concerns were expressed regarding the state’s recent spending patterns, which included an unprecedented $19 billion expenditure over the last two years. This spending was characterized as a substantial expansion of government, with particular emphasis on a dramatic increase in housing welfare funding, which rose from $100 million to $1 billion—a 1,000% increase. Critics argued that this funding approach unfairly taxed struggling Minnesotans to support housing for others.

The discussion also touched on welfare policies, with claims that the administration's recent measures included refundable tax credits for individuals who had never paid taxes, including undocumented immigrants. The committee member urged the administration to reconsider what they termed "overreach" in various legislative areas.

Despite these criticisms, there was a consensus on the need to address a projected $6.1 billion budget deficit. The committee member acknowledged the urgency of tackling this issue but expressed skepticism about the governor's approach to resolving it.

As the session progresses, further discussions are expected to delve deeper into the implications of the proposed tax changes and the broader fiscal policies of the Walz administration.