Governor Walz releases revised Minnesota budget

(ABC 6 News) – Governor Tim Walz today released his revised state budget, which he says adds more cuts, and protects investments made last session.

That revised budget includes just under $250 million in additional ongoing cuts for 2028-29, amid a looming deficit. Those cuts are paired with small, mostly one-time investments in critical work.

Investments will support Minnesota’s response to bird flu, and provide more funding for law enforcement training through the Philando Castile Memorial Training Fund. The proposed budget would leave over $2 billion on the bottom line for 2026-27.

According to Governor Walz’s office, the revised budget would maintain proposals in his original budget to curb growth in spending, lower the sales tax, combat fraud, and hold health insurers accountable for rising costs.

Cuts and Curbing Growth

The revised budget would save the state over $1.3 billion dollars by limiting year-over-year growth rates in Medicaid waivers without limiting eligibility for services. It also plans to cut funding to private schools and reduce Special Education transportation reimbursement costs by 5%. However, it would incentivize schools to create more efficient transportation.

Lowering Taxes

Walz’s proposal would cut the statewide sales tax by 0.075%. He also proposes expanding the sales tax base to services from investors, bankers, and lawyers. A new corporate franchise tax division unit would be created to close tax loopholes.

Cracking Down on Fraud

Walz’s anti-fraud package includes adding nine staff members to the Attorney General’s Medicaid Fraud unit, giving more authority to agencies to stop payments going to people or agencies involved with financial crimes, and using artificial intelligence to detect and prevent fraud.

Holding Health Insurers Accountable

The proposed budget would require insurers to take responsibility for the state share of reinsurance instead of taxpayers.

In a statement, Governor Walz said “This budget is fiscally responsible and prioritizes the programs that will set Minnesotans up for success for generations to come. By addressing the budget challenges we face today, we’re setting Minnesota up for long-term success and protecting the resources necessary to make Minnesota the best state to live, work, and raise a family.”