Gov. Tim Walz proposes sales-tax cut, insurer surcharge and fraud crackdown in 2025 State of the State

Members of a joint convention of the Minnesota House and Senate on Wednesday heard Governor Tim Walz outline a budget that he said would protect prior investments in education, health care and public safety while addressing long-term cost growth in human services programs.

Walz presented his plan on April 23, 2025, at the Minnesota State Capitol in St. Paul. The governor said the proposal would cut what he called a structural imbalance in state finances by about half over the next two years and would include what he described as the state's first-ever reduction in the statewide sales tax, funded by closing tax loopholes.

The speech — delivered before the full Legislature, the Minnesota Supreme Court, constitutional officers and invited guests — led with a defense of Minnesota’s approach to governing and a critique of federal policy moves. "Under this administration, the federal government exists to help the corporations as they screw the American people over," Walz said, adding that his administration would act to protect Minnesotans from federal cuts he predicted would hit programs such as Medicaid.

Why it matters: Walz framed the budget as a bid to sustain large recent investments while placing state finances on a more stable footing so future leaders "don't have…