Gov. Walz wants to focus on one-time spending amid recession fears

Minnesota is flush with cash, but Gov. Tim Walz, leery of a looming recession, is warning legislators not to add too much recurring spending to the state’s budget.

Walz said during a visit Tuesday to Lake Middle School in Woodbury that it feels like early 2020, when the coronavirus pandemic was on the horizon. Like then, he said, the state ought to be careful with its spending commitments.

“I think we’re going to have to focus heavily on one-time” spending, he said. “I think there’s still every realization that the economy will slow some over the next couple quarters, and we need to be thoughtful about that.”

At the same time, Walz said the state should be willing to spend where it’ll “make a difference.” For him, that’s public safety and education, from preschool through college.

The state budget office next week is expected to update its closely-watched state budget forecast, which will guide Walz and legislators as they build a budget for the 2024-25 biennium.

There still should be plenty of money available for one-time spending. That’s because lawmakers earlier this year spent little of the projected $9.3 billion surplus for the current biennium.

Walz still wants to issue rebate checks directly to residents to ease the pain of inflation, but fellow DFLers have been lukewarm to the idea.

With the DFL now in control of both the House and Senate, Walz figures to have an easy time getting much of his agenda adopted. On education, that agenda includes more school counselors and teachers of color, efforts to boost literacy and lots more money for schools, particularly those that don’t get supplemental revenue from local property taxpayers.

“Now is the time to be big on this, to not just tread water,” he said, noting that it’s hard for school leaders to plan when they don’t know whether voters will approve the next referendum.

Asked whether he’s interested in making school meals free for all students, he said, “We wanted universal meals. We want to get that there.” The state already covers the difference between free and reduced-price school meals, effectively making meals free to more students with higher family incomes.

House GOP leader Rep. Lisa Demuth, of Cold Spring, said earlier this month that her party agrees with the House DFL on spending more on public safety and cutting taxes on Social Security income. But she said that “simply putting more money into schools” is not going to raise academic achievement.

Walz may not need Republicans to get his agenda passed, but he said he has been talking with GOP leaders.

“There’s a real desire to understand we’re all in this together,” he said.

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