Yesterday, newly-inaugurated Minnesota Governor Tim Walz, laid out his executive budget for fiscal year 2020-2021.
Currently, the State of Minnesota has a $1.5 billion surplus. The Governor appears not to be satisfied with that amount of money and is demanding more from taxpayers.
Governor Walz has presented the State Legislature with a budget that will increase the gas tax by 20%, the registration tax, motor vehicle sales tax, and raise highway bonds as well. All in all, transportation and infrastructure will see an $18,000,000,000 increase over the next twenty years.
The gas tax that Governor Walz has proposed will catapult Minnesota to the 4th highest gas tax rate in the nation. A gas tax increase would hit the working families of Minnesota the hardest. The last thing they want right now is to have to double down on the price of gas.
Increasing the gas tax would make everyday life more expensive for Minnesota families and businesses. The fact this regressive tax hike will do the greatest harm to households who can least afford it is already bad enough. It’s even worse if, and when existing transportation dollars are not responsibly spent.
In addition to the new transportation tax increases, Walz has also asked to increase the sick tax, on patients seeking medical care, by $1.4 billion. This sick tax is used to pay for goods and services in the healthcare industry.
The sick tax was supposed to expire, however, Governor Walz is going to extend it. This tax has been used to pay for Minnesota Care and other subsidized health services.
According to Strategas Research Partners, 60% of the federal income tax cut would be wiped out by a $0.25 gas tax increase and rising prices. The United States is a more attractive destination for investment and commerce following the enactment of federal tax reform, and global capital flows are expected to shift to the U.S. as a result.