Governor Walz to Release Budget Recommendations Today

January 24, 2023

The DFL-controlled legislature continues to move significant legislation through at a breakneck pace, including codifying the right to abortion, paid parental and medical leave, and adult cannabis use. In what is usually seen as the unofficial start to the legislative session, the Governor will release his full budget recommendations today. This year is a bit different as policy and budget priority bills have already moved through multiple committees, but the Governor’s recommendations are still important in shaping what the overall two-year budget will ultimately prioritize. While we’ll get more details as these recommendations get introduced as individual bills, we have begun to see some of the administration priorities as they have unveiled portions of the budget over the past week. Two major areas of focus are children and families-focused budget items and plans for economic development.

The economic development portion of the Governor’s proposed budget is headlined by the creation of a new paid family and medical leave program, a DFL priority over the past 4 years that was never able to gain traction in the GOP controlled Senate. The program will have significant upfront costs to create and will be partially funded by a new payroll tax for employers, a proposal that has received some pushback given the state’s record surplus. Other areas of interest for EDAM members include extending the Historical Structure Rehabilitation tax credit, additional funding for the Angel Investment tax credit, increased investment in broadband infrastructure, and a proposed $1.5 billion investment in multiple forms of housing.

Some of the children and families-focused budget items that have workforce implications are child tax credits and new and increased funding to the childcare industry in hopes of increasing access and affordability. These ideas and plans will be more fully developed during the committee process.

The Workforce and Economic Development Committees in the House and Senate are meeting regularly now and have heard or will hear the paid family and medical leave bill this week. Yesterday the Senate Jobs Committee took up the confirmation of Commissioner Grove, that confirmation is expected to move to the full Senate Floor for a vote in the coming days. Commissioner Grove will be speaking at EDAM’s Winter Conference so expect to hear more specifics about the Governor’s proposed budget and DEED’s priorities, programs, and grants directly from the administration.