[ST. PAUL, MN] –  On February 19, 2019, Governor Tim Walz announced his budget proposal for the biennium with a focus on making investments in education, health care, and community prosperity. Below are his remarks as prepared for delivery:

Thank you for joining me today. I am incredibly proud to unveil the Budget for One Minnesota.

Over the past two years, I have had the immense privilege to visit with Minnesotans in their communities. From Grand Portage to Luverne, Minnesotans have graciously welcomed me into their schools, their VFWs, their coffee shops, and their homes.

They are grateful to live in Minnesota—a state that often ranks at the top in terms of health care, education, and quality of life. But they know we can do better.

Racial, geographic, and economic disparities in education and health care hold back our state from reaching its full potential. Minnesotans across the state struggle to find child care and housing that is affordable. Crumbling roads and bridges hamper our economy and threaten our safety.

Minnesotans are ready to find common ground, tackle these challenges, and build a better life for everyone.

As I traveled mile after mile and enjoyed countless conversations across the state, it became clear to me that there are three priorities the people of Minnesota share: Education; health care; and community prosperity.

Minnesotans want to bring down the cost of health care, provide a quality education to their children and grandchildren, and ensure communities across the state are prospering.

The budget I am unveiling today will make significant strides in achieving these priorities. I have often said that a budget is not only a fiscal document—it’s a moral document. This budget reflects the morals of the people of Minnesota. This is the budget Minnesotans voted for by historic margins.

The first priority my budget tackles is education. Minnesotans know investing in our children is investing in our future. As a former teacher, I’ve seen firsthand the power of education to change a life.

Every student in Minnesota deserves the opportunity to learn in the best schools in the country with caring teachers. But as I travel around the state, I see how the quality of a student’s education is too often dependent on their race or zip code.

A leveling off in state support for education has put more pressure on local funding and widened gaps between wealthy and poor and between metro and Greater Minnesota schools. While some schools have turf fields and a stadium, another school is trying to pass a referendum to fix a leaky roof.

And the situation is getting worse. Minnesota schools face a fiscal cliff few people know exists. Between rising need and lagging aid, the amount of funding schools must divert to pay for special education averages $830 per student and that number will only continue to grow.

This must change. We must make Minnesota the “Education State.”

That is why I am proposing a historic investment in education.

My budget will help close the funding gap and make sure that every child has a good teacher, receives individual attention, and has access to the materials they need to develop the knowledge and skills to compete in today's economy.

To do this, I propose increasing the basic formula for state funding by 3 percent in the first year of the biennium and 2 percent in the second, for a total new investment of $523 million.

This general funding formula is the biggest source of state aid to schools in Minnesota and impacts every student in the state. It is also the most flexible aid schools receive, allowing them to make local decisions to meet the unique needs of each student and school.

We will also invest in special education to stop the current gap from growing and prevent schools from being forced to divert general funding. This is critical for local school districts to do their job, and do it well.

We also know early childhood education can shape the remainder of a child’s life. Research shows a correlation between a child’s elementary language skills and how likely it is they will be incarcerated later in life. Governor Mark Dayton made great strides in expanding access to early education.

But if we don’t take action this year, the number of available Pre-K spots around the state will be cut in half. This will shut the classroom doors on 4,000 of our littlest learners across Minnesota and cause parents to scramble in search of other options for their children. Our budget invests $59 million to keep these preschool doors open.

The Lieutenant Governor and I often talk about how kids don’t come in pieces—meaning we must meet the needs of the whole-child to spur academic growth and opportunity. As a classroom teacher, I know that a student who is hungry can’t learn geography, a student who needs glasses can’t read the whiteboard, and a student who slept in the car the night before won’t ace their math quiz.

I am proud that this budget invests in wrap-around services that are proven to improve a child’s success. I am proposing increased support for schools to better meet the needs of nearly 9,000 students who are experiencing homelessness, and investing $8 million for full service community schools over the next four years.

Full-service community schools, located across the state, house practically everything a family needs in one place. With services such as primary health and dental care, job training and classes for adults, and youth development programs, these schools are a hub in their communities. Encompassing the idea of One Minnesota, these schools are a welcoming place for new immigrants in the cities and a vibrant gathering place in Greater Minnesota towns. 

We must tackle the racial and geographic opportunity gaps in education head-on. This is a moral issue—and it’s also an economic issue. Over the next decades, the majority of our workforce will be made up of people of color.

Our budget invests in data-driven solutions to close the opportunity gap and ensure equity in our education system. We tackle these disparities on the front lines by providing training and assistance for teachers and administrators. Research shows students are more likely to graduate if they have teachers that look like them, and so this budget doubles down on our commitment to recruit and retain teachers of color.

American Indian Tribal schools have been left wondering what their next year of funding will entail. The Bug-O-Nay-Ge-Shig school in Leech Lake garnered national attention in 2014 for its dilapidated conditions. Students learned in a cramped, damp, cold and leaky old pole building infested with rodents that was so cold they had to wear blankets and coats in class.

While the school has since been rebuilt, the report shined a light on the work we need to do to ensure Native students in Minnesota receive the high-quality education they deserve. We must build on our progress, not go backward. Yet our tribal schools face an almost 50 percent funding cut if we take no action this year. We cannot let that happen.

That is why my budget does what is just. It stabilizes and equalizes funding for students in tribal contract schools, protecting them from this cut and ensuring they are funded the same way as the rest of the schools in our state.

We must also address geographic disparities. Rural school districts struggle to keep teachers, afford buses, and provide opportunity for their students. The Floodwood School District recently proposed an emergency levy. If it doesn’t pass, they will be forced to lay off over a quarter of their teachers and merge grades.

By providing more support from the state, our budget will help provide rural districts with the stable resources they need and take a critical step toward making local school referendums extinct.

We will also expand access to our state’s Regional Centers of Excellence. These centers, which were named one of Harvard Ash Center’s Top 25 Innovations in Government in 2015, provide on-the-ground assistance to districts and schools in Greater Minnesota. With current centers in Marshall, Rochester, Sartell, Fergus Falls, Thief River Falls, and Mountain Iron, these centers support struggling schools through evaluation, training, and long-term planning. 

As we look to the future for our students, we must ensure they have the opportunity to pursue higher education or technical training to get a good-paying job and support their families.In our globalized economy, it is difficult to provide for a family without some sort of post-secondary education or training program. For our state’s growth, it is a necessity that we invest in our future workers.

The first thing our budget does is make higher education more affordable to more students across the state by increasing the state grant program, which provides financial aid for student from low-income, working, and middle class backgrounds. This aid gives students the choice to pick the college or university that best fits their needs.

Our state relies on our higher education system to train our leaders, build companies, and help solve our world’s most pressing problems. Our budget and bonding bill recommits our state’s investment in Minnesota State and the University of Minnesota system. By maximizing the life of facilities that serve students, faculty and staff system-wide, the bonding bill will keep the state at the forefront of emerging knowledge and educate the leaders of tomorrow.

We know that a four-year degree isn’t the only pathway for a bright future, especially at a time when many companies struggle to find skilled workers. My budget invests in workforce training and development programs with a focus on manufacturing, technology, health care services, and agriculture. Supporting these proven programs will help prepare Minnesota’s workforce to compete in the 21^st Century Economy.

The second priority of my budget is health care. What Minnesotans want from their health care is simple. They don’t want to get sick in the first place. But if they do, they want care at a price they can afford and at a location close to home.

For too many, this is not the case. Many Minnesotans do not have health coverage or struggle to afford their premiums. Skyrocketing costs for care and prescription drugs keep Minnesotans from getting the care they need.

Every Minnesotan deserves access to quality health care at a price they can afford. That’s why I am proposing a multi-pronged approach to expand access and keep down costs. My budget includes funding to extend low-cost coverage to thousands of farmers, small business owners, and entrepreneurs. It also provides every Minnesotan with an additional health care option, encourages stability in the individual market, and makes health care more affordable in Minnesota.

I will do this in three phases.

First, I will take immediate action by creating a subsidy program to reduce by 20 percent the monthly premiums for Minnesotans who receive their insurance through MNSure. This subsidy will be applied directly against a consumer’s premiums. By cutting out the middle man, this program will give power back to consumers instead of health insurance companies when it comes to making health care decisions.

Second, I will establish a state-based tax credit to help ensure Minnesotans on the individual market pay no more than roughly 10% of their income on health care. This will open up options for consumers, allowing them to purchase better plans that they don’t need to be afraid to use.

Finally, I will create a statewide public option known as ONECare Minnesota to increase access to comprehensive health coverage across the state. This buy-in option will offer a high-quality, affordable plan to Minnesotans with more services, lower deductibles, and lower copays than what it currently available within the individual market. When the market fails to offer enough choice for Minnesota families, Minnesota’s public option will bridge that gap.

My proposal also takes action to bring down the cost of prescription drugs. No one should be forced to choose between medications and basic needs like rent, food and other necessities. By leveraging the state’s purchasing power, my budget lowers prescription drug prices, increases transparency and ensures access to comprehensive drug coverage statewide. It also ensures that, regardless of the coverage program, people have access to needed medications with more consistent choices, less disruptions, more transparency, and less burden for health care providers.

My budget recognizes that dental care is essential to overall health. Access to dental care remains a major problem, especially for people living in Greater Minnesota. Many Minnesotans haven’t been to a dentist in years because they don’t have dental coverage, can’t get in to see a provider, or must travel long distances to receive care.

My proposal creates a simpler, more efficient and equitable model for purchasing dental benefits by establishing a common administrative structure across all state health coverage programs. This streamlined structure for dental benefits will help dentists serve all patients in their community, improving access and experiences to dental care for Minnesotans.

The third priority of my budget is community prosperity.

This past year, I had the opportunity to crisscross our state, visiting hundreds of communities. What became abundantly clear is that prosperity and opportunity for all people in all parts of our state stems from the well-being of their community. And while communities may look different, most share the same goals and face the same challenges.

Right now, whether from the urban Northside of Minneapolis or the rural town of Fairmont, many families struggle to find childcare for their kid, secure housing that’s affordable, or even just make ends meet.

The Minnesotans hit hardest by these realities are our communities of color and Native American communities across the state, and people living in towns across Greater Minnesota. We must double down in our efforts to support these communities and ensure racial and geographic equity in everything we do.

This budget puts forward the single greatest investment in Greater Minnesota in the history of our state. And it invests in some of the most meaningful state initiatives to lift up communities of color to have ever been proposed.

We must ensure communities across Minnesota aren’t just surviving, they are thriving.

Having a safe place for your child to go while you are at work is vital to your livelihood. Yet many Minnesota families can’t find affordable child care or drive far distances to do so. I am investing nearly $44 million to expand access to the child care assistance program, raise rates paid to providers, and improve stability for children in the program. This is a proven two-generation strategy that invests in children and promotes economic stability for their families.

We will also provide grants to communities facing a lack of affordable childcare across the state, particularly in Greater Minnesota. These grants will increase the supply of quality child care to reduce regional child care shortages, support increased workforce participation, and encourage business expansion in these areas.

I am also investing more than $60 million as a set aside to fund a new program the legislature is working on to provide access to paid family and medical leave for most Minnesotans. Whether it’s the arrival of a new child, caring for a loved one, or recovering from a serious illness, Minnesotans should be able to care for their themselves and their families without facing bankruptcy. Our administration is confident that this is an issue where legislators can come together to find common ground and provide relief to Minnesota families.

Our homes are the foundation of our flourishing communities; they fuel the engine of our economy. Yet the affordability of homes in Minnesota has been declining for years as rising costs for homes, transportation, health care, education and other basic goods outpace incomes. Through the budget and bonding bill, I am investing over $170 million to increase access to housing that is affordable in Minnesota.

This will improve housing stability, increase rates of homeownership for households of color, increase the supply of workforce housing in Greater Minnesota, and provide loans to help seniors stay in their homes. And as a continuation of my work in Congress, my budget strengthens critical services directly to veterans with the goal of becoming the fourth state to eliminate veteran’s homelessness.

We also know too many hard-working families in our state struggle to make ends meet. This is not made any easier by the fact that the cash grant offered to families through our Minnesota Family Investment Program has not been increased since 1986. I propose increasing the Minnesota Family Investment Program cash grant by $100 per month. This critical program invests in our most vulnerable children and families. Research shows when we increase family income we improve child outcomes.

In our effort to ensure communities in Greater Minnesota are thriving, I am increasing the amount of state aid to cities and counties across Minnesota. By reinstating funding for this critical aid, our budget will help local governments make needed investments in public safety, streets, bridges, libraries, parks, and housing. It will also help lower the pressure on local property taxes, which have recently seen significant increases. And it will empower local leaders with the tools they need to succeed.

I am also proposing property tax relief to communities across the state by modifying the sales tax exemption for local governments and non-profits on the purchase of construction materials. This provision will allow non-profits to invest more money into their mission, and local governments will save money and be able to invest in the needs of their community while providing property tax relief for their residents.

Access to high-speed broadband is no longer a nice-to-have, it is a necessity. Students shouldn’t have to log long hours at Perkins to finish their coursework, and farmers shouldn’t be hurt financially because they can’t use the internet to conduct business. Much like the rural electrification project, this is an area where we must settle for nothing less than a moonshot initiative. I am investing $70 million in a One Minnesota border-to border-broadband grant program to ensure all households have high speed internet access by 2021.

Facing farm production challenges, financial difficulties, and changes in the social fabric of rural living, farmers and other rural residents statewide are experiencing high levels of stress. Suicide, divorce, and substance abuse are on the rise. My budget supports rural mental health by providing one-on-one farmer counseling, additional advocates to help farmers get through difficult financial situations, and a 24-hour farm and rural helpline.

Whether in Greater Minnesota or the urban core, communities of color and Native American communities in our state face unacceptable racial disparities. Our budget takes meaningful action to address these disparities and ensure every Minnesotan has the opportunity to build a better life for their family.

For too long, organizations who are from and serve communities of color and Native American communities have been underfunded. Each community is unique and requires different solutions to move them forward. This innovation will come from the creativity, knowledge, and passion of the community, rather than a one-sized fits all, cookie cutter approach.

Across the board, our budget invests in programs that are based on the idea that the best solutions come from within a community. That is why our budget creates a Community Solutions Fund to provide grants to tribal and community partnerships aimed at reducing racial disparities in children’s health and development.

It also invests in state councils that ensure communities of color in Minnesota have a seat at the policy making table. Our state councils, like the Minnesota Council on Latino Affairs, the Council of Asian Pacific Minnesotans, the Council of Minnesotans of African Heritage, and the Disability Council advise the government on matters of interest to these populations who live in Minnesota.

These councils are a bridge of communication and collaboration between Minnesotans from these communities and the government, the private sector and nonprofits. As Minnesota’s demographics continue to change, it is important for growing and new communities to have a formal opportunity to voice their experiences. Our budget invests in these councils so that they can fully operate and communicate with their constituencies to help build One Minnesota.

We are proposing a transformational path for the Department of Human Rights. By opening four new regional offices throughout Greater Minnesota, we will promote diversity, inclusion, and racial equity in every corner of the state.

And as the Lieutenant Governor has previewed recently, Indian Country is represented in our budget. Our proposal includes funding for a missing and murdered indigenous women task force, for traditional healers to provide culturally relevant treatment for opioid addiction, and for increased funding for programs that support incarcerated parents.

Another critical component of community prosperity is the well-being of our transportation and transit system. Minnesota's crumbling infrastructure is putting our safety at risk. 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 one thousand dollars a year in gas, lost time, and car repairs. And unless we make serious investments, it will only get worse.

My budget proposes a 20 cent increase in the gas tax to keep Minnesotans safe, help businesses and farmers get goods to market, and ensure nothing like the I-35 bridge collapse happens again.

This is not a choice between whether we want the gas tax or not. It is a choice between living in a state with the best transportation system in the country or one with crumbling roads and bridges that risk our safety and keep away businesses.

I was in Hallock a few weeks ago in the northwest frontier of Minnesota. You might be familiar with it because it was near a place that reached 70 degrees below zero during the polar vortex.

Now that’s not only hard on people, it’s also hard on roads. Hallock has a successful liquor distillery called Far North Spirits that sits on a gravel road. The owner told me she wants to invest in our infrastructure, because better roads mean better business. She relies on good roads to get her products six hours away to the Twin Cities where most of her customers live. She also mentioned the need to invest in transit like light rail in Minneapolis and St. Paul because that’s how her customers get around.

This business owner understands One Minnesota. She knows that when the Twin Cities thrive, Hallock thrives. When Mankato thrives, Moorhead thrives.

Education. Childcare. Housing. Transportation. All of these things combine to provide what businesses critically need: qualified workers who have a place to live, someone to care for their children, and safe roads to get to work and transport goods.

We know businesses play an essential role in community prosperity, and this is the budget business has been waiting for.

Now it’s time to explain how we can afford to make these investments. You elected me to make smart choices to maintain what we have and to invest in the future, while maintaining a fair and balanced budget.

First, I propose that we keep our 25-year old, 2 percent provider tax. Since 1994, this tax has supported health care spending for MinnesotaCare. Letting this tax expire at the end of this year will create a nearly $1 billion deficit by the year 2023. It’s a smart tax that take cares of low-income and vulnerable Minnesotans and allows us to make the critical health care investments I described earlier.

Second, I propose a tax bill that prioritizes families and farmers, in contrast to the federal tax law. While we are going to conform to the federal law to reduce complications for businesses, we are also going to protect Minnesotans by keeping our deductions and exemptions that help families. The largest source of revenue for this budget comes from conforming to the new foreign income provisions and reducing special deductions for businesses.

While these taxes will help raise revenue to make critical investments in our state, Minnesotans will also see $440 million in tax relief. My conformity bill will cut taxes by over $220 million for the state’s farmers and small businesses.

I am investing over $100 million to expand the working family tax credit. This would lower taxes for 46,700 Minnesotan household by an average of $227.  Included in this is an increase the overall credit for all working family tax credit recipients to help them afford the impact of the transportation investments.

I am cutting Social Security taxes by increasing the subtraction in current law. Nearly 56% of Minnesota seniors would pay no state tax on their Social Security benefits under this proposal, and hundreds of thousands more would pay less.

I am providing a $50 per acre property tax credit for farmers who provide buffer strips of land near public waters and drainage systems. This proposal recognizes our farmers’ efforts to keep Minnesotan waters clean.

Minnesotans know they get what they pay for. They are willing to invest, but they want to know that their money is being spent wisely. This budget focuses on tested solutions, builds in accountability measures, and invests in programs that have proven success.

Our budget includes thorough measures to help ensure integrity in the important programs that we are investing in. For example, our budget requires child-care providers to keep daily attendance records for children to increase program accountability and prevent any over-billing. It puts a close eye on the administrative processes and establishes a penalty for any errors.

This budget also makes government work better for Minnesotans who live with a disability. We will streamline services across waiver programs that empower people to live full lives. We will do this by making the system easier to access, understand, and utilize for clients, their families and providers.

Not only does our budget make thoughtful decisions when it comes to the budget and bonding, we do it in a way that invests in what works. Our budget uses data-driven results, makes reforms to serve more Minnesotans, and empowers communities around the state to make decisions that work best for them.

Minnesotans do not have patience for kicking the can down the road on our greatest challenges. They want to tackle them head on.

That is why my budget addresses the biggest problems currently facing our society.My budget puts forward proposals to help combat climate change by funding statewide outreach to advance environmental policymaking, reduce food waste, and expand Minnesota’s electric-vehicle infrastructure.

It also includes funding for proposals to reduce gun violence, including the Extreme Risk Protection Order Bill to keep guns out of dangerous situations and legislation to expand background checks.

This is a strategic budget that allows us to maintain what we have while investing in the future. And we do it in a fiscally responsible way by keeping our budget fair and balanced.

As the federal government flounders, Minnesota will pave the way in finding solutions to our toughest challenges. As I’ve said many times, if Washington won’t lead, Minnesota will.

This budget is about building One Minnesota, the foundation of which is education, healthcare, and community prosperity.

Now I ask Commissioner Frans to dive into the numbers and explain how this budget is a fair and responsible budget. We will then take your questions. We will have fact sheets available online with further specifics and our commissioners will remain around the room after I leave to answer specific questions.