Governor Walz Highlights How Budget Will Build Community Prosperity in Greater Minnesota

Press Release

At the Duluth and St. Louis County Capitol Days breakfast and League of Minnesota Cities Legislative Conference, Governor Tim Walz today laid out how his budget promotes community prosperity in Greater Minnesota. Minnesota families statewide struggle to find childcare for their children, secure housing that's affordable, and find economic stability. Governor Walz today laid out how his budget expands access to affordable childcare and housing, invests in infrastructure and broadband internet, and gives local leaders the tools they need to succeed.

"The challenges our Minnesota cities face hold back our entire state from reaching its full potential. Too often the quality of a child's education is dependent on their zip code, families struggle to find affordable childcare and housing, and local leaders are left without the resources they need to tackle these problems," said Governor Walz. "That is why a main tenant of the budget we unveiled this week is Community Prosperity. We must ensure communities across Minnesota aren't just surviving, they are thriving."

This budget puts forward the greatest investment in Greater Minnesota in the history of our state. In total, the Budget for One Minnesota represents an investment of $512 million in Greater Minnesota investments over the next two years. It would:

INCREASE LOCAL GOVERNMENT AND COUNTY PROGRAM AID
Provide Historic Funding Increases for Local and County Governments
Governor Walz's proposal provides a historic increase in investments in Local Government Aid (LGA) and County Program Aid (CPA) by $30 million per year, returning them to 2002 and 2000 levels, respectively. This investment will help local governments pay for vital needs, such as local roads and public safety, while helping to keep property taxes low.

CREATE MORE AFFORDABLE HOUSING
Preserve and Expand Access to Affordable Housing for all Minnesotans
Governor Walz's budget and bonding proposals will direct $170 million to the preservation of existing affordable housing and to create new homes for Minnesotans across all incomes and in all areas of the state. This recommendation will create a full range of housing choices, including supportive housing for people experiencing homelessness, senior housing, family housing, and new homeownership opportunities. To accomplish this, Governor Walz supports authorizing $120 million in Housing Infrastructure Bonds, which will leverage additional private development funds and preserve federal dollars for rental assistance. An additional $30 million in general obligation bonds would preserve 3,000 units of publicly-owned housing across the state for the lowest-income Minnesotans.

Create Workforce Housing Opportunities
The affordability of homes has been a competitive advantage for Minnesota and our employers, but a growing shortage of homes and other market conditions are pushing prices beyond the reach of many individuals and families. With a $10 million increase to the Economic Development and Housing Challenge program, this proposal will develop 150-350 new rental housing and single-family housing opportunities throughout the state. The Governor's budget will help communities redevelop existing sites to create housing that better serves low- to moderate-income homeowners, homebuyers and renters.

EXPAND RURAL MENTAL HEALTH SERVICES
Increase Rural Counseling Services
Farmers and other rural residents statewide are experiencing high levels of stress, linked to farm production challenges, financial difficulties, changes in the social fabric of rural living, and other factors beyond their control. The Governor's budget provides $450,000 to expand on collaborative rural mental health efforts that began in 2017, including one-on-one farmer counseling and a 24-hour hotline -- critical resources that are currently not meeting growing demand. Furthermore, the budget proposes the addition of two Farm Advocates to the current team of 10 trained advisors, who provide one-on-one assistance for Minnesota farmers facing a crisis caused by either a natural disaster or financial problems.

PROVIDE BROADBAND ACCESS TO EVERY CORNER OF MINNESOTA
Develop a Border-to-Border Broadband Program
Access to robust broadband is now recognized as a critical factor in the economic and social sustainability of all Minnesota communities. In 2014, the state set a goal of border-to-border broadband access by 2022, signaling that access to quality broadband service should be a right for all Minnesotans. The Governor's budget recommends funding $70 million in the biennium for a border-to-border broadband program. The state will meet the statutory goal of border-to-border access of 25Mbps/3Mbps broadband service by the year 2022 and begin to pave the way for achieving the state's 2026 goal of reaching everyone with a service capable of delivering 100Mbps/20Mbps. This funding commitment will build on several years of public and private investments in broadband infrastructure in unserved and underserved areas of the state, helping more than 193,000 homes and businesses, primarily in rural areas, gain access to reliable broadband internet.

INVEST IN OUR COMMUNITIES
Provide Local Communities with Resources for Economic Growth
Local communities across Minnesota are facing challenges that are often times unique to them -- and local challenges are often best solved with local solutions. The Governor's budget proposes $2 million for a Community Prosperity Opportunity Grant program, providing grants to local and regional communities to engage in innovative economic development projects that will support economic growth and equitable prosperity. These grants will provide up to 85% in matching grants to local government units or 501(c)3 organizations that are partnering with one or more local government units.

INVEST IN TRANSPORTATION AND INFRASTRUCTURE
Fund a Comprehensive and Dependable Transportation Plan
Minnesota's transportation system is aging and struggling to keep up with the demands of our growing population. A recent independent report found that there are over one thousand Minnesota bridges and hundreds of miles of roads that are in poor condition. This costs the average Minnesotan, over $1,000 a year in gas, lost time, and car repairs.The Minnesota Department of Transportation projects that in order to simply operate and maintain our current roads and bridges, the state will need $18 billion over the next 20 years above current revenues. In order to accomplish that goal, Governor Walz's budget proposes a transformational funding package.

Initiate a 20 cent gas tax increase (phased-in over two years) and index the gas tax to inflation (beginning in FY 2023) to raise approximately $6.5 billion over 10 years. The gas tax will make Minnesotans safer, help businesses and farmers get goods to market, and ensure nothing like the I-35 bridge collapse happens again.
Increase the registration tax (increased tax rate from 1.25 percent to 1.5 percent and base tax fee from $10 to $45; change the depreciation schedule) to raise approximately $4 billion over ten years.
Increase the motor vehicle sales tax from 6.5 percent to 6.875 percent to raise approximately $300 million for roads and bridges over ten years, and $205 million for transit purposes.
Authorizing $2 billion in trunk highway bonds over 8 years starting in 2022.
To help lower- and middle-income Minnesotans pay for transportation investments, the Governor proposes an increase to the Working Family Credit of $100 for each single or head of household recipient and $200 for each married filing jointly recipient. With the transportation funding gap eliminated, Minnesotans will be better able to move to and from work, connect with other parts of the state and beyond, and depend on a smooth and reliable movement of goods and services. This proposal also supports jobs, providing new funds for construction projects that will employ thousands of construction workers and engineers in good paying jobs for years to come.

Replace Aging Infrastructure
Governor Walz's budget will modernize Minnesota's transportation system, repairing and replacing aging infrastructure and using materials and processes that will provide a longer, more useful life. More than 50 percent of Minnesota state roadways are 50 years old or older, and 40 percent of state bridges are in the same age range. This proposal will allow Minnesota to replace the aging infrastructure with modern materials and designs that will provide a longer life.

Provide Cities and Counties with Transportation Funding
Governor Walz's budget will address the long-standing need that county and city governments have for their transportation needs. Most of the miles of roadway in the state are county roads and city streets, which are used for daily trips to and from work. Minnesota's agriculture, manufacturing, and service industries also rely greatly on local roads to move products and services. This proposal will increase state transportation funding for roads and bridges by as much as 35 percent to Minnesota counties and cities.

EXPAND ACCESS TO CHILD CARE
Increase Investment in Child Care Assistance
The Child Care Assistance Program (CCAP) helps approximately 15,000 Minnesota families pay for child care so parents can work or go to school. Governor Walz's budget proposes $44 million to expand this program, helping keep children in child care with fewer disruptions and more consistent schedules. Increasing payments to many child care providers will help make child care more affordable and accessible to families. The budget raises the CCAP maximum rates and registration fees and changes the frequency of the child care provider market rate survey to every three years.

Expand Access for Families on Basic Sliding Fee Waiting List
Governor Walz's budget includes increased funding to buy down the waiting list for families who need child care assistance through the Basic Sliding Fee program. This will make an additional 1,000 families eligible to receive assistance for child care.

Increase Supply of Quality Child Care
The Childcare Economic Development Grants program at the Department of Employment and Economic Development provides grants to communities to increase the supply of quality child care. This reduces regional child care shortages, supports increased workforce participation, and expands new business development. Funding this program could result in up to 2,400 new child care slots being available across Minnesota. Priority will be given to communities that have a documented shortage of child care providers in their area and are experiencing above average workforce shortages and lower than average prime-age workforce participation rates.

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