Governor Walz Releases Budget Proposals Aimed at Making MN a Great Place for Families

St. Paul, MN — Governor Tim Walz and Lieutenant Governor Peggy Flanagan today announced a series of proposals to make Minnesota the best state in the country for kids. The first of four packages within their One Minnesota Budget, this $12 billion proposal would lower the cost of child care for middle-class families, reduce child poverty by expanding tax credits for families who need help the most, and make the largest investment in public education in state history. The Governor’s education plan will provide universal schools meals for students and expand access to special education and mental health resources.

Expand Access to Child Care and Early Learning 

To reduce child care expenses and provide economic relief to middle class and lower income families, Governor Walz and Lieutenant Governor Flanagan propose $539 million in tax credits in 2024-2025 and a $547 million in tax credits in 2026-2027 to expand the Child and Dependent Care Credit, reducing costs for 100,000 Minnesota households. This child care plan will allow families making under $200,000 with one child to receive up to $4,000 a year for child care costs. Families with two children could receive up to $8,000, and families with three children could receive up to $10,500. Governor Walz and Lieutenant Governor Flanagan also propose expanding public pre-K seats for nearly 25,000 eligible children, investing in early learning scholarships, and improving child care access for Minnesota families by increasing child care assistance payment rates. Finally, the One Minnesota Budget addresses Minnesota’s child care shortage by increasing staff compensation and supporting providers starting child care businesses. 

Support Working Families and Reduce Child Poverty 

Shown to reduce child poverty and improve outcomes for families at every stage of life, Governor Walz and Lieutenant Governor Flanagan recommend a nation-leading Child Tax Credit, providing lower income families $1,000 per child with a maximum credit of $3,000. This Child Tax Credit alone would cut child poverty by 25%. The proposal would result in $1.1 billion in tax cuts in 2024-2025 and a $1.2 billion in 2026-2027. At a time when more Minnesotans are accessing food nutrition programs, the One Minnesota Budget also invests in the Minnesota Food Shelf Program and emergency food and distribution facilities across Minnesota, increases outreach for the Supplemental Nutrition Assistance Program, and includes new funding to support food security among tribal nations and American Indian communities. Additionally, the Walz-Flanagan budget proposes a grant program that allows colleges and universities to provide parents or expectant parents with the support they need to complete their education. 

Provide a World-Class Education and Ensure No Child Goes Hungry 

With rising costs putting financial pressure on schools, Governor Walz and Lieutenant Governor Flanagan recommend tying school funding to inflation in all future years, starting in 2026, to ensure funding for schools keeps up with costs. Additionally, Governor Walz and Lieutenant Governor Flanagan propose a 4% increase to the general education funding formula next year and 2% the year after, a $717 million investment in 2024-2025 and a $1.48 billion investment in 2026-2027. The One Minnesota Budget also reduces the special education cross subsidy for school districts by 50%. To ensure no student goes hungry at school, the Governor and Lieutenant Governor’s budget includes $389 million in 2023-2025 and $424 million in 2026-2027 to provide universal school meals so no student needs to learn on an empty stomach. 

Prioritize Mental Health and Wellbeing 

Governor Walz and Lieutenant Governor Flanagan recommend funding to benefit children and young people’s social, emotional, and physical health by addressing shortages of school support personnel services. The One Minnesota budget would fund hiring school counselors, school nurses, school psychologists, school social workers, and chemical health counselors and a workforce initiative to address staffing shortages in these areas. Additionally, the Governor and Lieutenant Governor propose investing additional resources to increase access to infant and early childhood mental health consultation for school-based early childhood programs and invest in School-Linked Behavioral Health Grants and Intermediate School-Linked Behavioral Health Grants, so that children have the mental health support they need at all ages. In total, the Governor and Lieutenant Governor propose a $158 million investment to address the mental health needs of Minnesota’s youth and students.

Center Children, Youth, and Families in State Government 

Governor Walz and Lieutenant Governor Flanagan propose a new Department of Children, Youth, and Families that restructures state government to elevate child, youth, and family priorities and funding needs by providing focused leadership in the executive branch. This new agency will provide comprehensive support for families, including core programs from early childhood through youth. The core programs considered to move into the new agency include: child care and early learning programs; Child Support, Child Safety and other family-focused community programs; economic support and food assistance programs; and youth opportunity and older youth investments. 

Governor Walz joined R & J News last week where discussed his interest in making Minnesota a better place to raise a family and other priorities for his budget.

The Governor and Lieutenant Governor will announce additional components of the One Minnesota Budget in the coming weeks, including packages to invest in Minnesota’s economic future, protect health and safety, cut taxes, and improve the state’s infrastructure. The Governor’s entire two-year budget will be released on January 24.