Walz unveils scaled-down supplemental budget request amid COVID-19 worries

DFL Gov. Tim Walz on Thursday unveiled a slender supplemental budget proposal that would leave unspent $1.2 billion amid growing worry about the impact of COVID-19 on the U.S. and global economy.

“What we’re seeing both globally and we’re seeing in other states, I think that probably has tempered expectations to do our No. 1 priority and that is the health and safety of Minneosotans,” Walz said.

State leaders like Walz are grappling with the ramifications of the COVID-19 pandemic, which is wreaking havoc on the economy as states and countries announce travel bans and the cancellations of large gatherings.

Minnesota, which has five confirmed cases and is expecting more, is moving towards so-called community containment measures.  Already, health officials are recommending people avoid being in close contact with another and are urging sick individuals to stay home from work. Community containment efforts could take the form of school closures, event cancellations and bans on large gatherings as have been announced in states like California, New York, Washington and others. That in turn will likely decrease economic growth — and tax revenue.

Walz’s supplemental budget calls for a scaled-back list of priorities including replenishing the state’s rainy day fund after state lawmakers pulled more than $490 million from the reserve to balance the budget. If successful, Walz’s request would bring the state’s budget reserve to nearly $2.4 billion.

Walz is also calling for additional dollars for the state’s disaster assistance contingency account, asking lawmakers for $30 million that would go toward recovery efforts after natural disasters.

Altogether, the governor’s supplemental budget request would result in $256 million in new spending for the current two-year budget cycle. Last month, state budget officials announced a new estimate of the state’s budget surplus of about $1.5 billion budget, not accounting for inflationary pressures on spending.

Walz’s full supplemental budget request can be found here.