STACY, MN (FOX 9) – Minnesota Gov. Tim Walz and members of his cabinet visited a sheet metal fabricator in Metro North on Wednesday to release an economic plan that calls for improving access to child care and expanding the labor market over the next decade.
The proposal, presented by the Governor’s Economic Council, seeks an expansion of child care appropriations, millions of dollars for hiring out-of-state businesses and workers, and additional spending on the transportation needs of the state. Walz did not put a full dollar amount on implementing the plan, which would require buy-in from the state legislature.
At the same time, Walz renewed his call for $1,000 rebate checks for most adults in Minnesota. He and lawmakers have not agreed to hold a special session for direct payments despite months of debate.
“I keep hearing, ‘It’s a gimmick you want to make money back,'” Walz told reporters. “Okay, I’m going to follow that logic. It’s a gimmick not to return the money. So, I’m going to let the people of Minnesota decide: which gimmick would you like? To have no relief for the current situation or to have that to make a difference?”
As Walz promoted the economic plan, the Federal Reserve raised benchmark interest rates an additional three-quarters of a point for a second consecutive month in a bid to rein in runaway inflation, which at 9.1% in June, was the highest since 1981.
Inflation is a powerful political issue, but so is the possibility of a recession caused by Fed tightening. Fed actions will slow the economy by making it more expensive to borrow. The central bank is betting it can bring inflation down without recession and without the job losses that economic downturns have historically caused.
In Minnesota, the 1.8% unemployment rate in June was the lowest of any state in record-keeping history, which dates back to 1976. But job growth has slowed in recent months and remained stable in June.
Walz’s presumptive Republican opponent, Dr. Scott Jensen, said the governor’s economic plan lacked short-term fixes for price increases.
“What struck me most about Governor Walz’s 28-page economic plan was that he never once mentioned the words ‘inflation,’ ‘gasoline prices,’ or ‘costs. utilities,'” Jensen said in an emailed statement. “Governor Walz has proven once again that he is deaf to the plight of working families in Minnesota and is not up to the task of leading in the moment.”
Transportation costs, gas taxes
Walz’s economic plan includes a section on transportation that states that the state should “provide long-term sustainable revenue and encourage a dedicated local option for transportation taxes, recognizing that federal assistance may be limited and that d ‘other state and local funds are needed’.
In 2019, Walz lobbied for a gas tax increase of 20 cents. The latest plan does not provide for this specifically.
“‘No, no, no,'” Walz said when asked if he was advocating for a gas tax increase now. He said his 2019 gas tax proposal had been presented before Congress passes a massive infrastructure package in 2021 that would provide new transportation funds to the states.” The federal infrastructure program equates to a 30-cent increase in spending we were able to squeeze out of it. So we feel like we’re in a solid place.”
Walz asked Congress to suspend the federal gasoline tax of 18 cents per gallon. Jensen advocated suspending Minnesota’s 28-cent-per-gallon gasoline tax, which would require other sources of funding to avoid budget cuts for road and bridge projects.
Jensen previously advocated for the elimination of the state’s minimum gas mark-up law, though his campaign has since removed that idea from his gas pricing plan.