Minnesota Governor Tim Walz is unveiling his 2026 supplemental budget proposal amid a rising cost of living in Minnesota.
Walz introduced a fiscal plan that seeks to balance expansive middle-class tax relief with strategic spending cuts and new levies on the technology sector.
The proposal prioritizes lowering household costs through expanded childcare credits, and what would be the state's first-ever sales tax cut.
"There's no reason that sales tax can't be expanded to broader numbers so that the people who are at the top can pay a little bit on that," Walz says. "And the folks at the bottom can see a reduction in the sales tax."
The package also discusses some recovery strategies for businesses in the wake of operation metro surge.
The plan also offers up things like a new levy on social media giants to fund AI workforce readiness, and expanded childcare credits.
But Walz admitted that some of these changes may mean some spending cuts in areas like disability services, and senior care.
"We are at the very top in expenditure, we are at the top in these services that will continue to be there," Walz adds. "But we're looking towards long term sustainability in the future. So there are a few changes there."
Lawmakers are now set to negotiate these priorities under a deeply divided legislature.
The proposal includes what would be the state's first-ever sales tax cut
