Governor Walz, Lieutenant Governor Flanagan Announce Budget to Invest in Minnesota's Economic Future

Press Release

Governor Tim Walz and Lieutenant Governor Peggy Flanagan today announced a series of proposals to invest in Minnesota's economic future. The second of four packages within their One Minnesota Budget, this $4.1 billion proposal would provide paid family and medical leave for Minnesota's workers, bolster support for small businesses, and expand Minnesota's workforce in the most critical sectors. The One Minnesota Budget includes climate proposals which expand Minnesota's clean energy economy and reduce climate impacts for future generations. The Governor's agriculture budget, which is over $100 million, will support local farmers and producers grow their businesses while expanding the state's biofuels infrastructure, building soil heath, and supporting new and emerging farmers. Today's announcement follows the roll out of the One Minnesota Budget package focused on children and families.

"I'm committed to making sure Minnesota remains competitive in a global economy. From our nation-leading agriculture industries to Minnesota-based companies paving the way for a clean energy economy, Minnesota has one of the most diverse and most resilient economies in the country," said Governor Walz. "This budget invests in the people and businesses that made our economy strong in the first place, and it protects the natural resources that Minnesotans cherish most. By attracting and building a workforce that makes Minnesota a destination state for teachers, nurses, entrepreneurs, farmers, small business owners, and skilled workers, we are building an economy that will remain strong for generations to come."

"Our One Minnesota Budget envisions an economy that works for Minnesotans and their families and a sustainable future for our children. This budget works to lift up working people and ensure that all Minnesotans can thrive," said Lieutenant Governor Peggy Flanagan. "By investing in the clean energy workforce, providing paid family and medical leave for our workers, expanding electric vehicle infrastructure, preserving and rehabilitating our land, water, and air quality, and constructing homes and communities that are climate resilient -- we are building that brighter future. That's the transformational work our budget can do."

Support and Expand Minnesota's Workforce

Governor Walz and Lieutenant Governor Flanagan's budget creates a Paid Family and Medical Leave program to support businesses, help parents stay in the labor force, and ensure Minnesotans do not have to make the choice between a paycheck and taking time off to care for a new baby or a family member with a serious illness. The One Minnesota Budget also supports Minnesota's workers by increasing access to earned sick and safe time, ensuring workers can accrue up to 48 hours a year of earned sick and safe time for when they need to recover from an illness, go to a medical appointment, care for a child during a school closure, or get care and assistance due to domestic abuse, stalking, or sexual assault. Finally, Governor Walz and Lieutenant Governor Flanagan recommend expanding unemployment benefits to hourly workers in K-12 schools -- including bus drivers and support professionals -- who may need to apply for Unemployment Insurance benefits during the summer break.

The Governor and Lieutenant Governor recommend investing $30 million next biennium to support the Drive for 5 Workforce Fund, which will prepare Minnesotans to enter five of the most critical occupational categories in the state with high-growth jobs and family-sustaining wages: technology, caring professions, education, manufacturing, and trades. The budget also includes support and research to address challenges in the health care sector, including expanded training, mental health, and recruitment tools.

The Governor and Lieutenant Governor also recommend funding to implement the tentative contract agreement between the State of Minnesota and SEIU Healthcare Minnesota and Iowa, providing a historic rate increase for over 20,000 home care workers in Minnesota. The One Minnesota budget also creates educator pathways to address teacher shortages and recruit teachers of color and Indigenous teachers. Finally, Governor Walz and Lieutenant Governor Flanagan believe education is the greatest pathway to economic opportunity. Governor Walz and Lieutenant Governor Flanagan are breaking down financial barriers to higher education and ensuring postsecondary is an option for all Minnesota students by helping high school seniors apply to college for free through the Direct Admissions program.

Bolster Small Business Growth

Minnesota's small businesses employ three out of every four workers in the state. To provide the funding, support, and consulting that small businesses need, the Governor and Lieutenant Governor recommend an initial $18.5 million in funding for the Small Business Navigation Program, Small Business Development Centers, and the Small Business Partnerships Program in the next biennium. Governor Walz and Lieutenant Governor Flanagan also propose $20 million in funding for the Angel Tax Credit in the next biennium to assist early-stage businesses by providing a tax credit to investors or investment funds to incentivize investment in companies with founders that are women, veterans, people of color, Native people, and those headquartered in Greater Minnesota. With competition for business development at an all-time high, the One Minnesota Budget makes a one-time $150 million investment for the Minnesota Forward Fund. The fund would be used to create grants, loans, or forgivable loans for infrastructure or large-scale economic development projects.

Build Competitive Communities

Governor Walz and Lieutenant Governor Flanagan share the goal of ensuring all homes and businesses have access to broadband by 2026. Governor Walz and Lieutenant Governor Flanagan recommend $276 million to expand the reach of the Border-to-border broadband program to areas of Minnesota that are unserved or underserved. As power plants across Minnesota plan for closure, communities surrounding them face economic uncertainty. Governor Walz and Lieutenant Governor Flanagan recommend $10 million to support impacted areas by providing resources for these communities to diversify their economies and find new opportunities for quality jobs and economic growth.

Protect Minnesota's Natural Resources

In September, Governor Walz and Lieutenant Governor Flanagan released a comprehensive plan to protect Minnesota's environment and combat climate change . The One Minnesota budget builds on that plan and supports the protection and preservation of Minnesota's precious land and water resources. The One Minnesota Budget would restore more than 6,000 acres of grasslands and wetlands on existing public lands, ensure native tree seed is available to support reforestation efforts across the state, and fund the Habitat Enhancement Landscape Program which provides financial and technical assistance to establish or enhance areas of diverse native vegetation to support declining populations of wildlife species essential for ecosystems and food production.

Invest in a Clean, Resilient Future

To ensure Minnesota's homes remain safe and warm for years to come, Governor Walz and Lieutenant Governor Flanagan's budget invests in a pre-weatherization and workforce training program which covers costs to repair homes with health and safety problems and grows the clean energy workforce needed to make these important home improvements. The budget expands the Solar for Schools program, offering solar energy for up to 723 more schools across the state, reducing energy costs for schools, and offering lessons and career paths for students in solar technology. To help communities better prepare for extreme weather events and strengthen their local economies, Governor Walz and Lieutenant Governor Flanagan are expanding the resilient communities grant program to help communities upgrade aging infrastructure with climate-smart design, combat flooding and heat island effect, and create local jobs. Finally, Governor Walz and Lieutenant Governor Flanagan are committed to lowering greenhouse gas emissions. Their budget adopts a framework for the statewide commercial building energy code that ensures all new commercial and large multi-family construction is net-zero by 2036.

Support Farmers and Livestock Producers

The One Minnesota Budget supports local farmers and producers and increases the sales of Minnesota-raised livestock produce by providing grants to help meat, poultry, egg, and milk processors start up, modernize, or expand their businesses. To promote locally raised and processed meat and poultry, Governor Walz and Lieutenant Governor Flanagan also recommend expanding the Minnesota Grown program -- a program designed to promote products that were grown or raised on Minnesota farms. The One Minnesota Budget also continues the Agricultural Growth, Research, and Innovation (AGRI) program which provides financial assistance for activities that advance Minnesota's agricultural and renewable energy industries. Governor Walz and Lieutenant Governor Flanagan propose additional funds to the AGRI Biofuels Infrastructure Investment Grant program to promote the continued sale and use of higher ethanol blend biofuels and give drivers more affordable options at the gas pump. Farmers and producers have weathered many agricultural emergencies in the last few years. The One Minnesota Budget will replenish the Agricultural Emergency Account which allows a rapid response to agricultural emergencies including drought, flooding, HPAI, and other animal disease outbreaks. To help new and emerging farmers get their footing, Governor Walz and Lieutenant Governor Flanagan's budget provides a grant program specifically for new and emerging farmers to help them increase market access and sales. Finally, Governor Walz and Lieutenant Governor Flanagan propose investing in the health and safety of farmers through farm safety outreach, equipment upgrades, mental health outreach, and other support services.

Minnesotans from across the state shared their support for Governor Walz and Lieutenant Governor Flanagan's plan to invest in Minnesota's economic future:

"This is a true inflection point for our state: after years of economic disruption, we have a rare opportunity to create an equitable, inclusive, and resilient economy. Governor Walz and Lieutenant Governor Flanagan understand the importance of investing in Minnesota's people, centering equity, and growing economic opportunities for workers and small businesses. This a welcome down payment on the future of our state," said Paul Williams, president and CEO of Project for Pride in Living and co-chair of the Governor's Council on Economic Expansion.

"We are thrilled that Governor Walz & Lt. Governor Flanagan are making comprehensive, statewide paid family and medical leave a priority in their budget proposal. All Minnesota workers, families and businesses will be better off when they have the support they need to care for themselves or a loved one during a major medical emergency, adoption, pregnancy or end of life care," said Doran Schrantz, Executive Director of ISAIAH.

"Our goal for this contract was to make history and make Minnesota a leader in this industry. I am so proud we worked with Governor Walz's team to make this huge change for so many families and restored hope in our industry. Raising wages and making this a real career gives me hope that I'll be able to get help and more people will want to do this important work. The changes in this agreement will open the door to ensuring you can earn a living while expressing love and compassion for other people by doing care work. It's a relief to me, as a mother and a family caregiver, that we now have a path to bring other people in who choose to do this work. We can't wait for this to get passed as part of Governor Walz's budget," said Kerry Adelmann, a family caregiver who has cared for her disabled son for the last seven years and member of SEIU Healthcare Minnesota and Iowa.

"We all want Minnesota schools to be the best in the world," said Kelly Gibbons, Executive Director of SEIU Local 284. "Ensuring stable & quality staffing is how we do this because it's good for the workers and even better for the kids. We're so happy to see Governor Walz & Lt. Governor Flanagan continue to demonstrate their commitment to ending the unfair exclusion of school workers from the unemployment system. Their budget will address the staffing crisis in our schools by making sure that the Minnesotans who clean our schools, drive the busses, make the meals and support students and teachers in myriad ways have access to the same basic social safety net that most Minnesotans take for granted. We're proud to partner with them to finally make this policy a reality!"

"Governor Walz has put forth a budget that will improve the lives of workers across our state. Paid family and medical leave and earned sick and safe time will positively impact the lives of all Minnesotans," said Bernie Burnham, President, MN AFL-CIO.

"The governor's budget, shared today, includes historic general fund support to jumpstart overdue updating of Minnesota's outdated public water accesses and fish hatchery systems," said MN-FISH President Ron Schara. "It's clear the governor understands the importance of fishing in our culture and its $4.4 billion annual economic impact in the state."

"Gov. Walz's budget demonstrates he listens to and reacts to real challenges," said MN-FISH Executive Director Mark Holsten. "This is a big first step in ensuring Minnesota continues to offer great fishing now and into the future."

"Freshwater is grateful for the focused attention on climate from this administration," said Dr. Carrie Jennings, Research and Policy Director for Freshwater. "The changes in weather that we are already experiencing stress both the built and natural water environments. We must build resilience to protect previous investments and to find a sustainable path forward."

"Climate change affects us all: families, businesses, parents and children, cities and towns," said Executive Director of Conservation Minnesota Paul Austin. "Governor Walz's climate budget and priorities demonstrate a clear recognition of not only the climate challenges ahead but also the opportunities."

"The Nature Conservancy applauds this climate action proposal and its significant investments in natural climate solutions," said Ann Mulholland, director of The Nature Conservancy in Minnesota. "Minnesotans love our lands and waters. And we protect what we love. Bold investments in natural climate solutions such as planting more trees and cover crops will help Minnesota achieve its climate goals while also providing co-benefits like clean air and water, protection against drought and flooding, improved soil health, jobs and income, habitat for fish and wildlife and more opportunities for outdoor recreation."

"The biofuel infrastructure funding proposed by Governor Walz will help boost access to lower-cost, cleaner-burning E15 and higher-blend biofuels such as E85. Not only do these biofuel blends help Minnesotans save money at the pump; they also help reduce greenhouse gas emissions and drive economic vitality for farmers and rural communities. We thank Governor Walz for including this funding in his budget and look forward to working with the governor and the Legislature to advance policies that increase access to biofuels," said Richard Syverson, President, Minnesota Corn Growers Association.

"MSGA applauds Governor Walz on his continued leadership on biofuels. This investment in infrastructure ensures biofuels will continue to be at the forefront of the state's discussion on reducing carbon, which the biodiesel mandate is already doing today," said Minnesota Soy Growers Association.

"With the historic budget surplus and the leadership of Governor Walz and Lt. Governor Flanagan, I'm hopeful that this could be the strongest ag budget in memory," said Gary Wertish, President of Minnesota Farmers Union. "Throughout his first term, Agriculture Commissioner Thom Petersen did important work to make sure department programs met the needs of our family farmer members. What we've seen of this budget request builds on that work, investing in a distributed meat processing system, helping farmers implement voluntary soil health practices, building out biofuels infrastructure, and supporting new and emerging farmers. We're also glad to see the Governor propose securing the future of the Agricultural Growth, Research, and Innovation (AGRI) account, which has helped establish Minnesota as a leader in agriculture and is important to our members. We look forward to seeing the rest of the budget next week."

The Governor and Lieutenant Governor will announce additional components of the One Minnesota Budget over the next week to protect Minnesotans' health and safety, cut taxes, and improve the state's infrastructure. The Governor's entire two-year budget will be released on January 24.

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