Cato Institute gives Walz an F in fiscal policy
Every year, Cato Institute publishes a Fiscal Report Card on America’s Governors, which ranks how well each state’s governor performs on fiscal responsibility. Grades range from A to F. Generally,
Governors receiving an A are those who have cut taxes and spending the most, whereas governors receiving an F have increased taxes and spending the most.
In this year’s Fiscal report card, Gov. Tim Walz received a failing grade of F, and deservedly so. Walz has called for tax hikes even in times when our state was projected to have a surplus — like in 2021. Walz has also consistently pushed for spending increases despite our big and growing budget.
As Cato explains,
In Walz’s first year in office, Minnesota was projected to have large budget surpluses. Walz planned to spend the money and increase taxes to fund even more spending. Walz’s budget for 2020 “would add $2 billion more in new spending, and taxes would increase by $1.3 billion to pay for it, with the rest of the money coming from an existing surplus.”123 But Walz compromised with the legislature, and the final tax increase passed that year was about $330 million annually. Walz also pushed for higher gas taxes and vehicle fees to raise about $1 billion annually for transportation. Those increases were rejected.
Walz pushed for more tax hikes in 2021.124 He proposed adding a new individual income tax rate of 10.85 percent for high earners above the current top rate of 9.85 percent. He proposed a surtax on capital gains and dividends and proposed hiking the corporate tax rate from 9.8 percent to 11.25 percent.125 The proposals—which would have raised about $1.6 billion annually—were rejected by the legislature.126
In his 2022 state of the state address, Walz supported some tax reductions but wrapped his support in class warfare rhetoric: “We can cut taxes for the middle class without cutting taxes for massive corporations and the wealthiest people in Minnesota. They don’t need a tax cut.… Cutting taxes for the wealthiest amongst us will not guarantee opportunities in Minnesota for the wider variety of folks, and it certainly won’t grow our economy from the middle out.”127
Walz’s fiscal policies have failed our state
Minnesota is a high tax-high spending state. And as the American Experiment research has shown, these high taxes have contributed negatively to our economy in a lot of ways.
For one, our state has experienced an outflow of highly skilled productive, and high-income individuals. This is not a trend specific to Minnesota, it is an issue facing most — if not all — high-tax states.
Minnesota has also had a lower-than-average GDP and personal income growth, and our state also lags in business, as well as job creation.
Walz certainly deserves an F for his continued focus on tax and spending hikes despite our ailing economy.