Governor Walz’s Minnesota Ranked Worst in Fiscal Policy Nationwide

A recent analysis by the Cato Institute has ranked all 50 U.S. states based on fiscal policy, evaluating factors such as government spending, revenue collection, and taxation. Iowa, under Republican Gov. Kim Reynolds, topped the list, while Minnesota, led by Democratic Governor and Vice Presidential nominee Tim Walz, ranked last.

The Cato Institute, a libertarian think tank, praised Iowa for its fiscal responsibility, which included restrained government spending and tax reforms that led to reductions in income tax rates. Nebraska, West Virginia, and Arkansas followed Iowa in the rankings, while Minnesota and several other states received failing grades.

Walz’s Fiscal Record in Minnesota

Governor Walz’s low score is attributed to a series of tax increases and significant spending hikes during his tenure. The report highlights:

  • Increased spending: Since 2022, Minnesota’s budget has grown by 36%, rising from around $52 billion to nearly $71 billion.
  • Tax hikes: Walz has been criticized for pushing several tax increases. His 2019 budget proposal sought to raise $2 billion through new taxes, but the final compromise added around $330 million in new taxes annually.
  • Unsuccessful proposals: Walz also sought to introduce a new income tax rate of 10.85% for high earners, a surtax on capital gains, and an increase in the corporate tax rate, which the legislature rejected.
  • Middle-class tax impacts: One of Walz’s notable legislative moves was HF 2887, which increased taxes and fees related to transportation. These included indexing the gas tax to inflation, raising vehicle registration taxes, and increasing sales taxes in the Twin Cities.

Broader Implications

This analysis comes at a critical time, just weeks before the 2024 presidential election, where Walz, as the Democratic Vice Presidential nominee, faces heightened scrutiny.

The fiscal policies enacted under his leadership may become a focal point in the election, particularly with the report drawing attention to the strain his tax increases could place on Minnesota’s middle class.

The ranking reflects the broader ideological divide over fiscal policy, with Democratic states like Minnesota tending toward higher taxation and spending, while Republican-led states, including those in the top ten of the ranking, favor lower taxes and restrained spending.

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