Second piece of Walz budget proposal covers paid leave, workforce, climate

Billions would go to support a paid family and medical leave program and other projects aimed at improving Minnesota’s competitiveness.

People greet each other during event in Keewatin
Gov. Tim Walz is greeted by U.S. Steel officials Oct. 5 at a celebration marking the construction of a $150 million pellet plant in Keewatin, Minn. Walz has proposed $4.1 billion to support workforce and economic development.
Clint Austin / 2022 file / Duluth News Tribune

ST. PAUL — Minnesota Gov. Tim Walz on Thursday, Jan. 19, released the second part of his budget recommendations, with $4.1 billion in proposals aimed at supporting the state’s workforce and economic development.

The billions in the proposal, which covers spending for the next four years, would go to support a paid family and medical leave program, climate initiatives, workforce training and other projects aimed at improving Minnesota’s competitiveness, such as rural broadband expansion.

“This budget invests in the people and businesses that made our economy strong in the first place, and it protects the natural resources that Minnesotans cherish most,” Walz said in a news release about the proposal. “By attracting and building a workforce that makes Minnesota a destination state for teachers, nurses, entrepreneurs, farmers, small-business owners and skilled workers, we are building an economy that will remain strong for generations to come.”

A major component of Thursday's economic development budget proposal is one of the biggest priorities for Walz and Democratic-Farmer-Labor lawmakers this session: the creation of a paid family and medical leave program in Minnesota. Walz’s budget recommendations call for about $670 million to get the program started in its first two years before new payroll taxes could fund the system.

Paid family and medical leave is a top priority for Democratic lawmakers in the 2023 legislative session.

The current paid leave proposal being advanced by DFL lawmakers would offer up to 12 weeks of partially paid time off for family reasons such as a new child or a seriously ill or dying relative. It would also provide up to 12 weeks of medical leave, including for pregnancy complications. The program would likely need a payroll tax of 0.7%, which could be shared by employers and employees. Taxes would go into a state-administered fund.


Further, the budget calls for giving workers up to 48 hours of “sick and safe” time each year. Those hours could be used for illness, medical appointments, child care or seeking assistance for domestic abuse. Both sick and safe time and paid family medical leave proposals are moving through the Legislature.

Agriculture spending proposals in the budget include support for local farmers, biofuel infrastructure expansion and soil health programs. In all, the budget calls for $63 million over the next four budget years.

Walz and Lt. Gov. Peggy Flanagan are also calling for the state to spend $276 million on broadband internet with the goal of getting access to every corner of the state by 2026. About 92% of Minnesota has broadband access, and the remaining areas are some of the more difficult to access, officials have said.

State officials estimate 33,000 households in mostly rural areas of the state will gain high-speed internet access through the projects.

The climate portion of the budget proposal calls for around $473 million for projects ranging from school solar programs to electric vehicle charging infrastructure, as well as programs aimed at expanding a clean energy workforce. It also calls for a program to restore more than 6,000 acres of grasslands and wetlands on public land.

Walz and Flanagan are releasing their “One Minnesota” budget recommendations in four separate pieces. The administration said it would release the entire plan Tuesday, Jan. 24.

On Tuesday, Jan. 17, Walz proposed $12 billion in spending on education and family support programs. The governor is required to make his recommendations to the Legislature in January of a budgeting year, and lawmakers and the governor must pass a budget for the next two years by June.

The $12 billion package includes billions in additional education spending, including more than $800 million for universal lunch for public school students.

DFL lawmakers, who now have majorities in both the Senate and the House, have signaled their priorities closely align with Walz’s, with paid family and medical leave at the top of the list. It’s likely the final budget will look different from Walz’s initial proposals after the legislative process. And Thursday’s budget recommendation numbers are not the governor’s final proposal.

The exact numbers could also change after the Department of Revenue releases another budget forecast in February. Minnesota’s most recent two-year budget was more than $50 billion.


Minnesota has a historic $17.6 billion budget surplus, which has only continued to grow as lawmakers have not passed any significant legislation on how to use the money. Much of the surplus is one-time cash and will not appear again in future budgets.

Alex Derosier covers Minnesota breaking news and state government for Forum News Service.
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