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.

Gov. Tim Walz on Thursday pitched a tighter two-year budget, complete with spending pullbacks and other measures to keep a potential deficit at bay. He also proposed a lower state sales tax rate but called for extending the tax’s reach to financial services.

Minnesota Gov. Tim Walz presented his two-year budget proposal on Thursday amid an ongoing power struggle at the Capitol.

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.

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

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.

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.

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.