$12 billion package would lower cost of child care for middle-class families, expand tax cuts, and reduce child poverty Budget would provide largest investment in public education in state history, including universal school meals and increased access to mental health resources Proposed new state agency will focus on children, youth, and families

[ST. PAUL, MN] – Governor Tim Walz and Lieutenant Governor Peggy Flanagan today announced a series of proposals to make Minnesota the best state in the country for kids. The first of four packages within their One Minnesota Budget, this $12 billion proposal would lower the cost of child care for middle-class families, reduce child poverty by expanding tax credits for families who need help the most, and make the largest investment in public education in state history. The Governor’s education plan will provide universal schools meals for students and expand access to special education and mental health resources. Please see attached for more details on the budget package.

“As a former teacher, coach, and parent, I have made it my mission to make Minnesota the best state in the country for kids to grow up. We have a historic opportunity to take bold action to deliver for Minnesotans, and we’re putting forward a budget that meets the moment,” said Governor Walz. “For a middle-class family with young kids, this budget would cut the cost of child care by thousands. For kids across the state, it will reduce their chances of living in poverty. And for our students, it will provide the single-largest infusion of state funding in history, allowing them to provide every student, in every neighborhood, a world-class education.”

“As a mom of a fourth grader, former school board member, and life-long advocate for children, I am proud that our One Minnesota Budget includes investments and innovation that put children and families at the center of state government. This is the budget I’ve been working towards my entire career,” said Lieutenant Governor Peggy Flanagan. “We have an opportunity and a responsibility to invest in the programs and pathways that help our children grow up and meet their full potential. From lowering the cost of child care to reducing child poverty with the Child Tax Credit, and providing universal school meals to all students, the investments we make this legislative session will resonate for generations. It’s a very big deal for our kids.”

Expand Access to Child Care and Early Learning

To reduce child care expenses and provide economic relief to middle class and lower income families, Governor Walz and Lieutenant Governor Flanagan propose $539 million in tax credits in 2024-2025 and a $547 million in tax credits in 2026-2027 to expand the Child and Dependent Care Credit, reducing costs for 100,000 Minnesota households. This child care plan will allow families making under $200,000 with one child to receive up to $4,000 a year for child care costs. Families with two children could receive up to $8,000, and families with three children could receive up to $10,500. Governor Walz and Lieutenant Governor Flanagan also propose expanding public pre-K seats for nearly 25,000 eligible children, investing in early learning scholarships, and improving child care access for Minnesota families by increasing child care assistance payment rates. Finally, the One Minnesota Budget addresses Minnesota’s child care shortage by increasing staff compensation and supporting providers starting child care businesses.

Support Working Families and Reduce Child Poverty

Shown to reduce child poverty and improve outcomes for families at every stage of life, Governor Walz and Lieutenant Governor Flanagan recommend a nation-leading Child Tax Credit, providing lower income families $1,000 per child with a maximum credit of $3,000. This Child Tax Credit alone would cut child poverty by 25%. The proposal would result in $1.1 billion in tax cuts in 2024-2025 and a $1.2 billion in 2026-2027. At a time when more Minnesotans are accessing food nutrition programs, the One Minnesota Budget also invests in the Minnesota Food Shelf Program and emergency food and distribution facilities across Minnesota, increases outreach for the Supplemental Nutrition Assistance Program, and includes new funding to support food security among tribal nations and American Indian communities. Additionally, the Walz-Flanagan budget proposes a grant program that allows colleges and universities to provide parents or expectant parents with the support they need to complete their education.

Provide a World-Class Education and Ensure No Child Goes Hungry

With rising costs putting financial pressure on schools, Governor Walz and Lieutenant Governor Flanagan recommend tying school funding to inflation in all future years, starting in 2026, to ensure funding for schools keeps up with costs. Additionally, Governor Walz and Lieutenant Governor Flanagan propose a 4% increase to the general education funding formula next year and 2% the year after, a $717 million investment in 2024-2025 and a $1.48 billion investment in 2026-2027. The One Minnesota Budget also reduces the special education cross subsidy for school districts by 50%. To ensure no student goes hungry at school, the Governor and Lieutenant Governor’s budget includes $389 million in 2023-2025 and $424 million in 2026-2027 to provide universal school meals so no student needs to learn on an empty stomach.

Prioritize Mental Health and Wellbeing

Governor Walz and Lieutenant Governor Flanagan recommend funding to benefit children and young people’s social, emotional, and physical health by addressing shortages of school support personnel services. The One Minnesota budget would fund hiring school counselors, school nurses, school psychologists, school social workers, and chemical health counselors and a workforce initiative to address staffing shortages in these areas. Additionally, the Governor and Lieutenant Governor propose investing additional resources to increase access to infant and early childhood mental health consultation for school-based early childhood programs and invest in School-Linked Behavioral Health Grants and Intermediate School-Linked Behavioral Health Grants, so that children have the mental health support they need at all ages. In total, the Governor and Lieutenant Governor propose a $158 million investment to address the mental health needs of Minnesota’s youth and students.

Center Children, Youth, and Families in State Government

Governor Walz and Lieutenant Governor Flanagan propose a new Department of Children, Youth, and Families that restructures state government to elevate child, youth, and family priorities and funding needs by providing focused leadership in the executive branch. This new agency will provide comprehensive support for families, including core programs from early childhood through youth. The core programs considered to move into the new agency include: child care and early learning programs; Child Support, Child Safety and other family-focused community programs; economic support and food assistance programs; and youth opportunity and older youth investments.

Minnesotans from across the state shared their support for Governor Walz and Lieutenant Governor Flanagan’s plan to make Minnesota the best state for children and families:

“Many Minnesota leaders have talked about how much they value education, but very few have been as committed as Gov. Tim Walz to providing access to a great public school to every student, no matter what they look like, or where they live,” said Denise Specht, president of Education Minnesota. “This is a bold education budget that recognizes the scale of the multi-billion-dollar challenges we’re facing in Minnesota’s classrooms, from staffing, to mental health, to the rising costs of educating students in poverty and with special needs. We’re looking forward to working with the governor, lieutenant governor and legislators to pass an education budget that gives every student and educator, in every ZIP code, the tools they need to succeed.”

“We appreciate the Governor’s proposal to boost funding for early childhood scholarships, which have proven to be our best tool to help underserved children access high-quality early childhood programs,” said Charlie Weaver, Executive Director, Minnesota Business Partnership.

“When Minnesota’s children thrive, Minnesota thrives.? We are thrilled to see that reality reflected in the Walz-Flanagan budget proposal.?Significantly reducing child poverty on the path to eliminating it entirely is both the morally and economically the right thing to do,” said Alisha Porter, State Director, Children’s Defense Fund Minnesota. ? “In this time of plenty, hunger, housing instability, mental health challenges, learning loss, the caregiving crisis and so much more create barriers to success for too many Minnesota children, especially those from our Black, Indigenous and other communities of color. ?While everyone talks about the importance of our children, this budget puts the money on the line and walks the talk.”

“Creating an agency dedicated to stabilizing, unifying, and advancing programs dedicated to supporting children from birth through adolescence is a necessary step toward ensuring all Minnesota families can thrive. This step demonstrates just how serious the Walz-Flanagan Administration is about our kids,” said Doran Schrantz, Executive Director of ISAIAH.

“We are excited to see the Governor and Lt. Governor propose increased investments in youth, such as the after-school community learning grant program being reinstated, tax credits for families with children and youth, and prevention and intervention community programs supporting youth, and for the creation of a state agency that will be able to serve as a hub and advocate for youth in state government” said Youthprise President Marcus Pope.

"The Governor's proposed budget represents historic and unprecedented investments in Minnesota's children. These commitments to our youngest Minnesotans will strengthen our families and communities and represent a dramatic step forward in the fight to end childhood poverty," said Jessica Webster, Staff Attorney, Legal Services Advocacy Project.

“On behalf of the Voices and Choices for Children Coalition, we are delighted to see this historic investment in children and families in the Governor and Lt. Governor’s budget proposal. In particular, $ 10M/year for the Community Solutions Grant Program will benefit the healthy development of children of color, American Indian children, and children that live in greater Minnesota for years ahead. The inclusion of the Community Solutions Fund in this budget proposal rightly centers community identified issues and solutions at a time when the need is urgent and sets us all up for a brighter future,” said Dianne Haulcy and Rinal Ray, Co-Chairs Voices and Choices Coalition Steering Committee.

“This is the boldest and most comprehensive budget for young children, their families, and early educators that we have ever seen. Through both significant direct investments and expanded tax credits the vast majority of Minnesota families will receive additional help to afford quality child care . Expanded workforce grants will support compensation in the child care field without passing that cost on to parents via tuition. A Department of Children and Families will consolidate early childhood programs from multiple state departments for better accountability, efficiency, and innovation,” said Clare Sanford, Minnesota Child Care Association. “Any working parent of young children knows the stress of gut-wrenching, impossible choices when quality child care is out of reach or extremely difficult to maintain. We must do better, and this thoughtful package uses multiple levers to address this complicated issue. Governor Walz and Lt. Governor Flanagan are walking their talk. Wow. Just wow.”

“NAMI Minnesota is pleased with the Governor’s investments in children’s mental health. We know that our children and youth are struggling, and these funding increases will help begin address their needs,” said Sue Abderholden, MPH, Executive Director, NAMI Minnesota.

“These investments will support Minnesotans across the state get access to nutritious foods, especially at a time when demand continues to rise. I am grateful for Governor Walz and Lt. Governor Flanagan for their commitment to food security for the people of Minnesota,” said Allison O’Toole, CEO, Second Harvest Heartland.

“Family Resource Centers are family-based, community-specific solutions to the everyday problems that families face. Scott County families, residents and taxpayers all benefit from this work that involves and assists families to learn, grow and address problems with a minimum of government intervention. My hope is that the growth and success of our Family Resource Centers will result in decreased child poverty, the end of child abuse and neglect, and healthier families in Scott County,” said Commissioner Weckman Brekke, Scott County, MN.

“Governor Walz’s investment in child care will go a long way towards addressing the more than 42,000 child care slot shortage in Greater Minnesota. The investment in the Economic Development Child Care grants, which have proven successful at helping to create new child care slots and retain existing child care providers across the state, will empower communities to address this crisis in innovative ways,” said Scott McMahon, Executive Director, Greater Minnesota Partnership.

“This is the kind of investment that we need to make for children and families. It centering children and families in the decisions our government makes and focuses financial decisions on them. This is the way to run government for children and families, and I appreciate the governor and lieutenant governor making these investments for Minnesotans,” said Colleen Moriarty, Executive Director, Hunger Solutions of Minnesota.

“Governor Walz’s budget proposal is game changing for children and families. The child tax credit—which includes youth under 18—will build on the work we’re doing in Saint Paul and help us achieve our shared goal of ending child poverty,” said St. Paul Mayor Melvin Carter. “The Governor’s proposal to create a new agency is an exciting and incredibly important step to ensure the ongoing coordination and prioritization necessary to make Minnesota the best state for children, youths and families.”

“When Governor Walz and Lieutenant Governor Flanagan launched the Children’s Cabinet in 2019, they directed their agencies to center children and families in state government,” said Erin Bailey, Executive Director of the Governor’s Children’s Cabinet. “By proposing a state agency solely focused on children and families, the Walz-Flanagan One Minnesota Budget delivers on that promise. The creation of a new agency puts us on the path to having one front door for families and gives our children and youth a sustained voice as a cabinet-level agency. I am grateful for Governor Walz and Lieutenant Governor Flanagan’s bold action to address the needs of Minnesota’s kids and families.”

The Governor and Lieutenant Governor will announce additional components of the One Minnesota Budget in the coming weeks, including packages to invest in Minnesota’s economic future, protect health and safety, cut taxes, and improve the state’s infrastructure. The Governor’s entire two-year budget will be released on January 24.