Bracing for economic downturn, pandemic, Walz recommends modest supplemental budget

As part of his supplemental budget, Walz recommends $21 million be added to the state's Public Health Response Contingency Account, which could be used for COVID-19 response.

As the threat of a COVID-19 outbreak in Minnesota looms, Gov. Tim Walz on Thursday, March 12, 2020 proposed a modest supplemental budget, with a sizable bottom line as back-up. Sarah Mearhoff / Forum News Service

ST. PAUL — Bracing the state for a COVID-19 outbreak and resulting economic downturn, Minnesota Gov. Tim Walz is recommending a modest supplemental budget with a focus on emergency preparedness and maintaining a cushion for the state.

In his supplemental budget released Thursday, March 12, Walz recommended spending $257 million for fiscal year 2020‐21 and $269 million for fiscal year 2022‐23, and adding $491 million back into budget reserves. Walz also proposed leaving $1.2 billion on the bottom line — a sizable cushion to soften a potential blow from a COVID-19 outbreak and potential resulting economic downturn.

Walz's proposal comes as the United States faces a global pandemic of COVID-19, a respiratory illness caused by exposure to coronavirus. As of Thursday afternoon, nine Minnesotans have tested positive for the illness, and Walz said the state has to prepare for a larger outbreak and resulting impacts on workers, businesses, health care facilities, schools and more.

"There are going to be resources needed during this pandemic," Walz said Thursday. "It makes sense to me to leave those numbers on the bottom line so that we’re in a position to be flexible and react."

As part of his supplemental budget, Walz recommends $21 million be added to the state's Public Health Response Contingency Account, which could be used for COVID-19 response. And as winter thaws and the threat of springtime flooding looms, Walz also recommended $30 million be added to the state's Disaster Assistance Contingency Account in case of natural disaster.


"Spring flooding does not care that we’re in the middle of the COVID crisis," he said.

In order to maintain a modest budget and sizable reserves, Walz said he had to make some concessions. He encouraged the Legislature to do the same as they enter budget negotiations — out of which Democrats were hoping to pull funding for early childhood education , and Republicans hoped for broad tax cuts .

"There are priorities that are absolutely critical to me that aren’t here, things that I have spent my whole career trying to advocate for, but now is not the time to do that," Walz said.

House Speaker Melissa Hortman, D-Brooklyn Park, on Thursday called Walz's proposal "very responsible in light of our present circumstances."

"It’s really prudent to have limited expectations of spending in this environment, and that’s changed since COVID-19, so I think it’s a responsible approach right now," she said. "That being said, the executive proposes, the Legislature disposes.”

Even with a smaller budget, Walz encouraged the Legislature to pass a "robust" bonding bill, like his $2.03 billion package . In times of economic distress, he said interest rates are low, and the state could benefit from an investment in infrastructure and job creation.

Senate Majority Leader Paul Gazelka, R-East Gull Lake, argued Thursday that the same argument could be applied to cutting taxes, which he still wants to see this session .

“We’re still going to have that discussion but I think it’s prudent to make sure we have resources for the future," he said. "I think we’ll be able to work together to figure out a way.”


Walz's proposal also includes funding to test the state's rape kit backlog, improve public safety, prevent farming accidents, prep the state for federal Real ID requirements, tackle youth vaping, increase Child Care Assistance Program (CCAP) rates for affordable child care and improve mental health care access for Minnesotan children, veterans, farmers and rural residents.

Mearhoff is a Minnesota Capitol Correspondent for Forum News Service. You can reach her at or 651-290-0707.
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