Gov. Tim Walz is pitching his first budget under the new Trump era as a counterweight to the incoming president’s threats to impose tariffs, which he says will raise costs on everyday Minnesotans. His plan would lower Minnesota’s sales tax rate for the first time in state history by 0.

Minnesota Gov. Tim Walz called for spending cuts Thursday in a $65.9 billion two-year budget proposal that includes a modest reduction in the overall state sales tax but new taxes on services like legal and financial advice.

In regards to the statewide sales tax, Walz is proposing a .75% reduction to the tax rate alongside provisions to expand the sales tax base to close so-called "loopholes" for service providers, such as bankers and attorneys.

Walz focused on tackling fraud, cutting state spending and long-term fiscal stability in Minnesota’s 2026-27 budget.

The state of Minnesota is spending more money than it’s bringing in, and if current trends continue, the state will spend down the current balance as soon as 2027. DFL Gov. Tim Walz wants to address the issue mostly by slowing state spending on disability services,

Governor Tim Walz and Lieutenant Governor Peggy Flanagan presented their 2025 biennial budget, which included the first sales tax in the state's history.

Gov. Tim Walz's budget proposal would make changes to sales tax collections and trim state spending in an effort to stave off a steep shortfall in future years.

He wants to cut the statewide sales tax by 0.075% — which is $0.075 on a $100 purchase — moving it to 8.6% from 8.675%.

Minnesota Governor Tim Walz has proposed his annual budget, and this year, he’s taken a slimmed-down approach. The governor unveiled his budget on Thursday.