Minnesota House releases their budget targets

Clark Goldenrod
Apr 26, 2022
The Minnesota House’s newly released budget targets lay out their priorities for use of the state’s substantial budget surplus. They outline how the House would use $5.7 billion in this budget cycle to expand and strengthen public services. Their largest area of investment is education, which would see a $1.2 billion boost in FY 2022-23.  

The House also would allocate $1.6 billion in their omnibus tax bill, which includes one-time rebates for families with children; expansions of tax credits for things like student loans, child care, and education expenses; larger property tax refunds; and funding to local governments. The House targets leave $1.9 billion of the FY 2022-23 surplus unallocated. 

Budget targets set the size of each omnibus budget bill, as well as the tax and bonding bills. Each legislative body sets their own targets, which describe the net changes to state general fund spending in each budget area and could also reflect revenue increases or transfers between funds.  

This year is a bit unusual in that many of the House and Senate omnibus bills were released before public targets were announced.
 House Budget Targets      FY 2022-23 general fund changes
Education          $1.2 billion
Health and Human Services
(includes $150 million Preventing Homelessness target)
         $700 million 
State Government
(includes $400 million Pensions target)
         $477 million 
Early Childhood          $250 million
Environment          $240 million 
Housing          $230 million 
Transportation          $225 million  
Workforce and Business Development          $207 million 
Capital Investment          $200 million 
Public Safety          $200 million 
Judiciary          $140 million 
Higher Education          $100 million 
Climate and Energy          $80 million 
Agriculture          $60 million
Labor, Industry, Veterans & Military Affairs
(includes $44 million Veterans & Military Affairs target)
         $51 million 
Industrial Education & Economic Development          $25 million
Commerce          $7.8 million
Other bills      
Frontline Workers (House File 2900)          $1 billion
Reinsurance (Senate File 3472)          $313 million
Claims, other bills          $53 million
Total net spending          $5.7 billion
Tax reductions and aids to local governments          $1.6 billion
Total including Tax changes          $7.4 billion

This year, the House also includes targets for several bills that are travelling separately from the omnibus budgets. These include bills to supply payments to frontline workers, reinsurance (which provides payments to health insurance companies to hold down premiums in the individual insurance market), as well as bills to fund ALS research, a Southwest light rail audit, and more. 

The House targets are in strong contrast with the Senate's priorities. While the Senate has yet to release formal targets, the Senate’s tax bill would cut state revenues by $3.4 billion in FY 2022-23 and $5 billion in FY 2024-25 – taking up about 80 percent of the state’s structural surplus in that future budget cycle. These tax cuts come primarily from two poorly targeted proposals: a first bracket income tax rate cut and an untargeted expansion of the state’s Social Security income tax exemption, both of which leave out many lower-income Minnesotans while providing the biggest tax cuts to higher-income Minnesotans.  

Since the tax bill is so large, the Senate proposes much less investment in public services: their $1.4 billion in total new investment in FY 2022-23 is about one-quarter the size of what the House proposes, and they propose smaller investments than the House in every area with the exception of Transportation.  

For a fuller comparison of the House’s and Senate’s budget plans this session, see our earlier analysis.