Walz Restructures Rebate Checks, Says Millions Of Minnesotans Would Benefit


Minnesota Gov. Tim Walz restructured his signature rebate check proposal Tuesday, making the direct payments more lucrative for some while cutting out hundreds of thousands of households by dropping income limits.

Under Walz’s plan, individuals making less than $75,000 a year would receive $1,000. Married couples earning less than $150,000 would get $2,000 from the state. Parents would receive an additional payment of $200 per dependent child, up to $600.

Walz estimates that 2.5 million households would get a check, smaller than his original 2022 proposal that he said would’ve benefited 2.7 million households. The rebates would consume $4 billion of the $17.6 billion budget surplus, the governor said. The 2022 version of Walz’s rebate checks had much looser income caps: $164,400 for individuals and $273,470 for married couples.

The governor, a second-term Democrat, also proposed excluding more Social Security income from state tax. The change will save 43% of recipients an average of $278 per year. Fifty-five percent of Social Security recipients already pay no tax.

Walz’s plan is about one-fifth the size of the tax break that legislative Republicans and several DFL senators want. They’ve proposed a full exclusion, which would cost the state an estimated $2.8 billion in lost tax revenue over the next four years, compared with $468 million in lost revenue under Walz’s proposal.

Overall, Walz has proposed spending $16 billion of the state’s $17.6 billion projected budget surplus through a series of family tax credits, public school spending, and funding boosts to climate initiatives, public safety, and housing. All of the spending requires approval from the DFL-controlled Legislature before it can become law.

Legislative Democrats and Republicans are scheduled to respond to the governor’s proposal later this afternoon.

This story is developing and will be updated.

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